UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of June, 2022
Commission File Number: 001-34476
BANCO SANTANDER (BRASIL) S.A.
(Exact name of registrant as specified in its charter)
Avenida Presidente Juscelino Kubitschek, 2041 and 2235
Bloco A – Vila Olimpia
São Paulo, SP 04543-011
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ___X___ Form 40-F _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes _______ No ___X____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes _______ No ___X____
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes _______ No ___X____
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Free Translation into English from the Original Previously Issued in Portuguese)
Index
Statement of Comprehensive Income. 18
Statements of Changes in Stockholders' Equity – Bank. 19
Statements of Changes in Stockholders' Equity – Consolidated. 20
2.Presentation of Financial Statements. 25
3.Significant Accounting Policies. 26
4.Cash and Cash Equivalents. 34
6.Securities and Derivatives Financial Instruments. 36
8.Credit Portfolio and Allowance for Expected Losses Associated with Credit Risk. 50
10. Other Financial Assets. 54
11. Tax Assets and Liabilities. 56
13. Dependences Information and Foreign Subsidiary. 62
14. Investments in Affiliates and Subsidiaries Subsidiary. 63
18. Other Financial Liabilities. 73
19. Other Payables – Other. 74
23. Income from Services Rendered and Banking Fees. 85
25. Other Administrative Expenses. 85
26. Other Operating Income. 85
27. Other Operating Expenses. 86
29. Employee Benefit Plans - Post-Employment Benefits. 88
30. Risk Management, Capital and Sensitivity Analysis. 98
31. Corporate Restructuring. 101
Composition of Management Bodies as of June 30,2022. 108
Declaration of directors on the financial statements. 110
Performance Review
Dear Stockholders:
We present the Performance Commentary to the Individual and Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Banco) for the semester ended June 30, 2022, prepared in accordance with accounting practices adopted in Brazil, established by Corporation Law, together with the rules of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and the model of the document provided for in the Accounting Plan of Institutions of the National Financial System (Cosif) and the Securities Commission (CVM), which do not conflict with the rules issued by Bacen.
The Condensed Consolidated Interim Financial Statements prepared based on the international accounting standards issued by the International Accounting Standards Board (IASB) for the semester ended June 30, 2022 were simultaneously disclosed on the website www.santander.com.br/ri.
1. Macroeconomic Environment
At the end of the second quarter of 2022, Banco Santander observed that the median of the projections regarding the performance of the Brazilian economy indicate a growth of the Brazilian GDP of 1.2% in 2022 compared to the expansion of 4.6% in the previous year. The projection for 2022 is higher than that observed at the end of the first quarter and, in the Bank's assessment, was influenced by the recent publication that the effective result observed in that period was beyond the market consensus - the median of the estimates indicated a seasonally adjusted quarterly expansion of 0.5% for the first quarter of 2022. The economic activity data released was in line with our GDP growth estimate in the previous quarter, we estimated a growth of 1.0% and reinforced our expectation that the Brazilian economy will grow 1.2% in 2022.
In the last quarter, the Bank witnessed the interannual variation of the IPCA reach 12.1%, a level above the target of 3.50% determined for 2022 and higher than the value of 9.5% projected by Santander for the same year. The Bank understands that this inflationary environment and its balance of risks were the reasons for the Central Bank of Brazil to raise the basic interest rate to 11.75% p.a. to 13.25% p.a. between the end of the second quarter of 2022 and the previous quarter. Santander believes that this approach to the Selic rate increases the chance that inflation will converge to the targets established within the time horizon relevant to monetary policy. In this sense, the Bank projects that the Selic rate will reach 5.3% p.a. at the end of 2023 and 3.0% p.a. at the end of 2024.
Regarding the behavior of the exchange rate, Banco Santander saw the quotation of the Brazilian currency against the US dollar closing the second quarter of 2022 at R$5.10/US$. That is, above the rate of R$4.74/US$ seen at the end of the previous quarter. This trajectory of devaluation of the real is in line with our forecast that the exchange rate will end the year 2022 quoted at R$5.15/US$.
The performances mentioned above took place in the midst of an international environment that the Bank considered unfavorable and which highlighted the following themes: 1) intensification of the pace of monetary policy adjustment in the US; 2) beginning of normalization of monetary policy in the Euro Zone; 3) a new outbreak of COVID-19 contamination in China, causing the re-implantation of lockdowns in important cities in the country such as Shanghai and Beijing and; 4) an increase in the price of a barrel of oil resulting from supply restrictions, which reinforced inflationary pressures around the world. In the domestic environment, Santander understands that the main themes were the following: 1) approval of tax measures to try to alleviate inflationary pressures, which increased discomfort with the dynamics of public accounts in the years ahead and; 2) withdrawal of potential presidential candidates, reinforcing the polarized nature of this year's election.
2. Performance
2.1) Corporate Income
Consolidated Income Statements (R$ Millions) | 1S22 | 1S21 | annual | 2Q22 | 1Q22 | quarter | ||||||
Financial Income | 42,399.6 | 30,253.1 | 40.1 | 48,094.7 | (5,695.1) | (944.5) | ||||||
Financial Expenses | (25,915.8) | (8,898.7) | 191.2 | (41,235.0) | 15,319.2 | (369.2) | ||||||
Gross Profit From Financial Operations (a) | 16,483.8 | 21,354.4 | (22.8) | 6,859.7 | 9,624.1 | (28.7) | ||||||
Other Operating (Expenses) Income (b) | (5,551.2) | (7,528.1) | (26.3) | (1,553.0) | (3,998.2) | (61.2) | ||||||
Operating Income | 10,932.6 | 13,826.3 | (20.9) | 5,306.7 | 5,625.9 | (5.7) | ||||||
Non-Operating Income | 416.3 | 28.1 | 1,381.4 | 44.8 | 371.5 | (87.9) | ||||||
Income Before Taxes on Income and Profit Sharing | 11,348.9 | 13,854.4 | (18.1) | 5,351.5 | 5,997.4 | (10.8) | ||||||
Income Tax and Social Contribution (a) | (2,288.5) | (5,926.9) | (61.4) | (749.1) | (1,539.4) | (51.3) | ||||||
Profit Sharing | (1,039.1) | (940.5) | 10.5 | (563.5) | (475.6) | 18.5 | ||||||
Non-Controlling Interest | (98.7) | (67.9) | 45.4 | (62.2) | (36.5) | 70.5 | ||||||
Consolidated Net Income | 7,922.7 | 6,919.1 | 14.5 | 3,976.8 | 3,945.9 | 0.8 | ||||||
OPERATING RESULT BEFORE ADJUSTED TAXATION | 1S22 | 1S21 | annual | 2Q22 | 1Q22 | quarterly |
(R$ Million) | ||||||
Result before Taxation on Profit and Participation | 11,248.7 | 13,854.3 | (18.8) | 5,251.3 | 5,997.4 | (12.4) |
Foreign Exchange Hedge | - | (792.4) | (100.0) | - | - | - |
Operating Income Before Adjusted Taxation | 11,248.7 | 13,061.9 | (13.9) | 5,251.3 | 5,997.4 | (12.4) |
INCOME TAX | 1S22 | 1S21 | annual | 2Q22 | 1Q22 | quarterly |
(R$ Million) | ||||||
Income tax and social contribution | (2,288.5) | (5,926.9) | (61.4) | (749.1) | (1,539.4) | (51.3) |
Foreign Exchange Hedge | - | 792.4 | (100.0) | - | - | - |
Adjusted Income Tax and Social Contribution | (2,288.5) | (5,134.5) | (55.4) | (749.1) | (1,539.4) | (51.3) |
The annualized return for the period, based on the accounting result on average equity, reached 19.56%, an increase of 1.7 p.p. compared to the same period in 2021.
a) Foreign Exchange Hedge of Grand Cayman and Luxembourg Branches
The different tax treatment of such exchange differences results in volatility in the operating result and in the tax expense accounts (PIS/COFINS) and income taxes (IR/CSLL), as shown below:
Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches | 1S22 | 1S21 | annual changes% | |||
Exchange Variation - Profit From Financial Operations | (2,500.3) | (1,944.4) | 28.6 | |||
Derivative Financial Instruments - Profit From Financial Operations | 2,622.8 | 2,869.3 | (8.6) | |||
Income Tax and Social Contribution | - | (792.4) | (100.0) | |||
PIS/Cofins - Tax Expenses | (122.5) | (133.4) | (8.2) |
|
2.2) Assets and Liabilities
Consolidated Balance Sheets | Jun/22 | Dec/21 | annual changes % | ||
Current Assets | 517,537.7 | 509,576.8 | 1.6 | ||
Long-Term Assets | 469,051.0 | 453,799.1 | 3.4 | ||
Total Assets | 986,588.7 | 963,376.0 | 2.4 | ||
Current and Long-Term Liabilities | 904,854.6 | 882,996.9 | 2.5 | ||
Deferred Income | - | 382.3 | (100.0) | ||
Non-Controlling Interest | 1,398.9 | 1,257.2 | 11.3 | ||
Stockholders' Equity | 80,335.2 | 78,739.6 | 2.0 | ||
Total Liabilities and Stockholders' Equity | 986,588.7 | 963,376.0 | 2.4 | ||
|
2.3) Stockholders’ Equity
As of June 30, 2022, Banco Santander's consolidated shareholders' equity increased by 2.0% compared to December 31, 2021.
The variation in Shareholders' Equity between June 30, 2022 and December 31, 2021 was mainly due to the net income for the period in the amount of R$7,923 million, the negative equity valuation adjustment (securities and derivative financial instruments) in the amount of R$1,421 million and the payment of dividends in the amount of R$2,000 million and Interest on Equity in the amount of R$2,700 million.
For additional information, see note 21.
2.4) Basel Index
Bacen determines that financial institutions maintain a Reference Equity (PR), Tier I Equity and Core Capital compatible with the risks of their activities, higher than the minimum requirement of the Required Reference Equity, represented by the sum of the credit risk, market and operational risk.
As established in CMN Resolution No. 4,958/2021, the PR requirement is 11.50%, including 8.00% of Minimum Reference Equity, plus 2.50% of Additional for Capital Conservation and 1.00% of Additional systemic. Tier I PR is 9.50% and Minimum Principal Capital is 8.00%.
Continuing with the adoption of the rules established by CMN Resolution No. 4,955/2021, the calculation of capital ratios is calculated on a consolidated basis based on information from the Prudential Conglomerate, whose definition is established by CMN Resolution No. 4,950/2021, as shown in follow:
Basel Index% | Jun/22 | Dec/21 |
Tier I Regulatory Capital | 76,350.3 | 76,969.9 |
Main Capital | 69,626.6 | 69,919.9 |
Supplementary Capital | 6,723.7 | 7,050.1 |
Tier II Regulatory Capital | 12,659.1 | 12,591.3 |
Regulatory Capital (Tier I and II) | 89,009.4 | 89,561.3 |
Credit Risk | 546,464.4 | 527,119.3 |
Market Risk | 20,899.8 | 15,122.2 |
Operational Risk | 59,663.3 | 58,499.8 |
Total RWA | 627,027.5 | 600,741.3 |
Basel I Ratio | 12.18 | 12.81 |
Basel Principal Capital | 11.10 | 11.64 |
Basel Regulatory Capital | 14.20 | 14.91 |
2.5) Main Subsidiaries
The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the seme ended June 30, 2022, of Banco Santander's main subsidiaries:
Subsidiaries (R$ Millions) | Total Assets | Stockholders' Equity | Net | Loan | Ownership/Interest (%) | ||||
Aymoré Crédito, Financiamento e Investimento S.A. | 69,333.3 | 12,305.2 | 375.4 | 54,571.9 | 100% | ||||
Santander Leasing S.A. Arrendamento Mercantil | 15,020.1 | 11,053.3 | 325.2 | 2,609.8 | 100% | ||||
Santander Corretora de Seguros, Investimento e Serviços S.A. | 11,669.8 | 4,597.6 | 567.1 | - | 100% | ||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | 3,547.9 | 3,290.4 | 153.6 | - | 100% | ||||
Santander Corretora de Câmbio e Valores Mobiliários S.A. | 1,257.9 | 806.8 | 66.9 | - | 100% |
The financial statements of the above Subsidiaries were prepared in accordance with the accounting practices adopted in Brazil, established by the Corporation Law, together with the rules of the CMN, Bacen and the document model provided for in the Accounting Plan of Cosif Institutions, of CVM, which do not conflict with the rules issued by Bacen, without the elimination of operations with affiliates.
3. Corporate Restructuring
During the semester ended in June 30, 2022 and the year ended December 31, 2021, several corporate movements were implemented with the aim of reorganizing the operations and activities of the entities in accordance with Banco Santander's business plan.
For additional information, see the explanatory note to the financial statements No. 31.
4. Strategy and Rating Agencies
For information regarding the Bank's strategy and rating at rating agencies, see the Results Report available at www.santander.com.br/ri.
5. Corporate Governance
The Governance structure of Banco Santander Brasil is made up of the Executive Board and its Executive Committee made up of the Chief Executive Officers, Senior Executive Vice-Presidents and Executive Vice-Presidents, and by the Board of Directors and its Advisory Committees, which are: Audit, Risks and Compliance, Sustainability, Compensation and Appointment and Governance.
For more information on the corporate governance practices adopted by Banco Santander Brasil and resolutions of the Board of Directors, see the electronic address www.santander.com.br/ri.
6. Risk Management
Bacen published on February 23, 2017, CMN Resolution No. 4,557, which provides for the risk and capital management structure (GIRC) which came into effect from the same year. The resolution highlights the need to implement an integrated risk and capital management structure, definition of an integrated stress test program and Risk Appetite Statement (RAS - Risk Appetite Statement), constitution of a Risk Committee, definition of a disclosure policy of published information, appointment of director for risk management, director of capital and director responsible for the information disclosure policy. Banco Santander develops the necessary actions on a continuous and progressive basis, aiming at adherence to the resolution. No relevant impacts arising from this standard were identified.
For more information, see note 30 to this publication.
Capital Management Structure
Banco Santander's capital management structure has robust governance, which supports the processes related to this issue and establishes the attributions of each of the teams involved. In addition, there is a clear definition of the guidelines that must be adopted for the effective management of capital. Further details can be found in the Risk and Capital Management Framework, available on the Investor Relations website.
Internal Audit
The Internal Audit reports directly to the Board of Directors, and the Audit Committee is responsible for its supervision.
The Internal Audit is a permanent function, independent from any other function or unit, whose mission is to provide the Board of Directors and senior management with independent assurance on the quality and effectiveness of internal control and risk management processes and systems (current or emerging) and government, thus contributing to the protection of the organization's value, solvency and reputation. Internal Audit has a quality certificate issued by the Institute of Internal Auditors (IIA).
In order to fulfill its functions and coverage risks inherent to Banco Santander's activity, the Internal Audit has a set of internally developed tools that are updated when necessary. Among them, the risk matrix stands out, used as a planning tool, prioritizing the risk level of the auditable universe considering, among others, its inherent risks, the last audit rating, the degree of compliance with the recommendations and its dimension. The work programs, which describe the audit tests to be performed, are periodically reviewed.
The Audit Committee and the Board of Directors favorably analyzed and approved the Internal Audit work plan for the year 2022.
7. People
At Santander, we continue to take care of our people. After all, they are the ones who think, design, develop, interact and build what Santander wants to be. This is why the Bank invests in each of its 52,993 employees here in Brazil.
On the subject of Health, we have implemented a series of actions to promote the well-being and physical and emotional health of our employees, especially at this time of resumption after COVID-19, always following the guidelines of Organs health and health bodies.
For the development of our people, the Corporate University – the Santander Academy, works for a strong, transversal culture, enabling everyone, online and in person, to improve what they already know and explore new possibilities. From mandatory certifications for certain functions to Digital Leadership courses, the most important thing is to get out of your comfort zone and invest in yourself by expanding your knowledge and repertoire.
Santander supports leaders and managers so that they are close and available. This action is based on three pillars: Feedback, Open Chat and Personalized Recognition, ensuring alignment between everyone through recurring and frank conversations, career guidance and special moments to reward the growth of teams.
Santander values a diverse environment, where every skill and every difference is valued. An example is the Affinity Group, created to promote diversity and inclusion based on the 5 pillars: Female Leadership; Racial Equity; Disabled people; Diversity of Education, Experiences and Generations and the LGBT+ pillar. Another good example is the Talent Show. In it, Santander opens space to learn about the most different performances and explore the universe of skills that exist at the Bank, allowing interaction and fraternization among colleagues.
In the Customer sphere, we remain focused on offering the best products and services, in a Simple, Personal and Fair manner.
In this context, in May we had “Todos na Mesma Página”, which is an initiative created in 2021 and which takes place 3 times a year. At this meeting, we encouraged the reading of a book and provided a debate between our CEO and the entire organization. In this last presentation, we did the debate of the book “O Poder dos Momentos” in podcast format with the participation of 26 thousand spectators, and brought the provocation of how we can create “unforgettable moments”, for our clients and our teams.
We also had our first Blood Donation Campaign of the year in May, with excellent attendance, saving more than 6,500 lives.
8. Sustainable Development
Banco Santander Brasil's Sustainability strategy is, based on principles of Responsibility, to support our transformation into the best consumer company in Brazil. For this to happen, the focus on the client becomes even deeper and is allied to our purpose of generating value to society in general, in the social, environmental and governance aspects. These aspects have been transversely rooted in our culture and business for more than 20 years.
Through this strategy, we want to lead today's transformation towards a better, more prosperous and fair society, maintaining excellence and responsibility in internal management, having ethical values as a base and technology at the service of people and businesses.
We recognize our role as a financial institution in promoting sustainable businesses, helping our communities to thrive. We highlight some initiatives in 2T22:
Environmental
We enabled BRL 15.3 billion in sustainable businesses and maintained the leadership in the bookkeeping of CBIOs, a market that we helped create in 2020 and of which we currently account for 54.8% of the market share, operating in both the primary and secondary markets. We also launched our New Green Entrepreneur Plan, with differentiated financing conditions for works with environmental certification, both for Wholesale and SME customers.
In line with our NET ZERO commitment, we have reached 80% use of renewable energy in our administrative buildings and stores throughout Brazil, with our goal of reaching 100% by 2025. In addition, we migrated 100% of SX and Elite cards to recycled cards (76% of our card base).
Social
We continue to work so that everyone has opportunities. This quarter, we joined the Aliança pela Inclusão Productiva as founding members and launched the Santander Chama Public Notice, a platform through which employees indicate productive inclusion projects to receive support from the bank. At Santander Prospera Microfinanças, we reached 791 thousand active clients and a portfolio of R$ 2.3 billion.
In addition, we launched an engagement mechanism through Esfera, our rewards program, for donating drinking water through the use of loyalty points. In April, we organized, in partnership with the Bem Maior Movement, “LEGADO”, the largest philanthropy event in recent years in the country to reinforce the theme among great entrepreneurs and Brazilian families, with the participation of more than 600 people and excellent media coverage.
In the pursuit of gender equality, we reached 30.1% of women in leadership positions and 27.6% of blacks in the organization. Our ambition is to reach 40% representation of these two groups by 2025. The participation of women on the Board of Directors was 27% in the second quarter of 2022.
Governance
We launched the Santander Brasil 2021 ESG and Climate Actions Report (available at: santander.com.br/ri/relatórios), which reinforces our commitments to shareholders, customers, employees, suppliers and society, addressing the initiatives and results we have achieved in the last year.
9. Effects of the Pandemic - COVID-19
The Bank monitors the effects of this pandemic that affect its operations and that could adversely affect its results. Since the beginning of the pandemic in Brazil, Committees have been structured to monitor the effects of the spread and its consequences, with actions to mitigate the impacts of COVID-19.
The Bank maintains its operational activities, observing the protocols of the Ministry of Health and other Authorities. Among the actions taken in 2022, we highlight (a) encouraging and monitoring the vaccination rate of employees (b) testing protocol for contacts, regardless of the presence of symptoms, and suspected cases (c) safe return of the group with the highest risk to face-to-face work and maintenance in a remote environment for those with special medical conditions.
Even with the fall of the state of public emergency and the easing of distancing measures, the contamination rates and the severity of the cases continue to be monitored by the Administration until there is greater technical certainty regarding the impact of the disease at a global level.
10. Independent Audit
Banco Santander's policy, including its subsidiaries, in contracting services unrelated to the audit of Financial Statements by its independent auditors is based on Brazilian and international auditing standards, which preserve the auditor's independence. This rationale provides for the following: (i) the auditor must not audit its own work, (ii) the auditor must not exercise managerial functions for its client, (iii) the auditor must not promote the interests of its client, and (iv) need for approval of any services by the Bank's Audit Committee.
Pursuant to CVM Instruction 381/2003, Banco Santander informs that in the period ended June 30, 2022, PricewaterhouseCoopers did not provide services unrelated to the independent audit of the Financial Statements of Banco Santander and its subsidiaries superior to 5% of total fees related to independent audit services.
Furthermore, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls in place to ensure its independence, which include an assessment of the work performed, including any service other than an independent audit of the Financial Statements of Banco Santander and its subsidiaries. This assessment is based on applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and provision of professional services unrelated to the audit of the Financial Statements by its independent auditors during the period ended June 30, 2022, did not affect the independence and objectivity in conducting the external audit work carried out at Banco Santander and other entities of the Group, since the above principles have been observed.
The Board of Directors
The Executive Board
(Authorized at the Board of Directors' Meeting of 07/27/2022)
Bank | Consolidated | ||||
Notes | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Current Assets | 528,864,591 | 522,451,023 | 517,537,739 | 509,576,839 | |
Cash | 4 | 10,091,602 | 16,361,758 | 10,119,817 | 16,386,974 |
Financial Instruments | 455,649,493 | 443,560,677 | 436,238,846 | 425,610,218 | |
Interbank Investments | 5 | 116,209,643 | 85,800,514 | 60,985,981 | 31,388,970 |
Securities and Derivative Financial Instruments | 6 | 62,146,236 | 78,980,822 | 72,006,912 | 93,620,934 |
Derivative Financial Instruments | 6 | 16,438,177 | 15,273,412 | 10,799,059 | 7,279,673 |
Lending Operations | 8 | 113,699,034 | 113,914,019 | 144,151,371 | 144,239,508 |
Others Assets Instruments | 10 | 147,156,403 | 149,591,910 | 148,295,523 | 149,081,133 |
Leasing Operations | - | - | 1,104,664 | 1,117,370 | |
Provisions for Expected Losses Associated with Credit Risk | 8.e | (7,029,219) | (6,208,228) | (8,642,642) | (7,706,994) |
Other Assets | 12 | 65,041,053 | 67,383,339 | 72,286,178 | 73,005,988 |
Current Tax Assets | 5,111,662 | 1,353,477 | 6,430,876 | 1,163,283 | |
Long-Term Assets | 477,213,331 | 458,365,721 | 469,050,987 | 453,799,131 | |
Financial Instruments | 397,126,393 | 387,956,693 | 419,064,391 | 400,059,113 | |
Interbank Investments | 5 | 29,074,140 | 33,260,243 | 2,121,437 | 2,240,348 |
Securities and Derivative Financial Instruments | 6 | 135,536,639 | 129,206,353 | 147,328,855 | 134,085,048 |
Derivative Financial Instruments | 6 | 15,503,679 | 13,667,486 | 15,723,663 | 13,810,051 |
Lending Operations | 8 | 211,345,146 | 203,445,400 | 247,467,700 | 239,240,166 |
Others Assets Instruments | 10 | 5,666,789 | 8,377,211 | 6,422,736 | 10,683,500 |
Leasing Operations | - | - | 1,605,835 | 1,578,582 | |
Provisions for Expected Losses Associated with Credit Risk | 8.e | (19,143,650) | (17,165,339) | (21,698,863) | (19,424,300) |
Other Assets | 12 | 14,472,409 | 14,489,073 | 17,184,160 | 17,360,213 |
Tax Assets | 34,558,792 | 35,767,085 | 39,692,280 | 41,289,987 | |
Current | - | 2,593,535 | - | 3,331,917 | |
Deferred | 11 | 34,558,792 | 33,173,550 | 39,692,280 | 37,958,070 |
Investments | 39,110,191 | 25,980,085 | 851,149 | 428,488 | |
Investments in Associates and Subsidiaries | 14.b | 39,106,265 | 25,958,916 | 847,100 | 408,693 |
Other Investments | 3,926 | 21,169 | 4,049 | 19,795 | |
Fixed Assets | 15 | 5,795,289 | 6,066,686 | 6,106,595 | 6,384,348 |
Real Estate for Use | 2,457,105 | 2,463,155 | 2,737,773 | 2,752,082 | |
Other Fixed Assets in Use | 13,408,847 | 13,292,159 | 13,650,425 | 13,528,400 | |
(Accumulated Depreciation) | (10,070,663) | (9,688,628) | (10,281,603) | (9,896,134) | |
Intangible | 16 | 5,293,907 | 5,271,438 | 6,245,440 | 6,122,700 |
Goodwill on Acquisition of Subsidiaries | 27,220,515 | 27,220,515 | 28,271,901 | 28,155,084 | |
Other Intangible Assets | 11,240,739 | 10,793,517 | 11,637,037 | 11,145,052 | |
(Accumulated Amortizations) | (33,167,347) | (32,742,594) | (33,663,498) | (33,177,436) | |
Total Assets | 1,006,077,922 | 980,816,744 | 986,588,726 | 963,375,970 |
The accompanying notes from Management are an integral part of these financial statements.
Bank | Consolidated | ||||
Notes | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Current Liabilities | 610,270,829 | 581,835,528 | 602,481,538 | 571,159,070 | |
Deposits and Other Financial Instruments | 583,039,652 | 570,676,801 | 564,863,002 | 552,620,227 | |
Deposits | 17 | 298,672,993 | 302,306,231 | 297,961,505 | 298,306,809 |
Money Market Funding | 17 | 103,632,573 | 85,154,534 | 89,424,547 | 79,933,047 |
Local Borrowings | 17 | 58,116,542 | 76,021,633 | 58,139,768 | 76,026,549 |
Domestic Onlendings - Official Institutions | 17 | 3,858,244 | 4,387,014 | 3,858,244 | 4,387,014 |
Funds from Acceptance and Issuance of Securities | 17 | 40,127,620 | 28,875,943 | 39,968,148 | 27,581,480 |
Derivative Financial Instruments | 6 | 17,816,303 | 14,479,201 | 13,308,299 | 6,956,577 |
Other Financial Liabilities | 18.a | 60,815,377 | 59,452,245 | 62,202,491 | 59,428,751 |
Other Liabilities | 19 | 26,147,330 | 10,218,257 | 35,337,841 | 16,164,475 |
Provision for Tax Risks and Legal Obligations | 20.b | - | 87,702 | 123,624 | 171,130 |
Provision for Judicial and Administrative Proceedings - Labor and Civil Lawsuits | 20.b | 1,636,216 | 1,565,666 | 1,833,057 | 1,665,134 |
Other Provisions | 19 | 1,624,381 | 1,527,594 | 5,888,132 | 5,730,626 |
Others | 19 | 22,886,733 | 7,037,296 | 27,493,028 | 8,597,586 |
Current Tax Liabilities | 11 | 1,083,847 | 940,470 | 2,280,695 | 2,374,368 |
Long-Term Liabilities | 315,461,513 | 319,776,644 | 302,373,034 | 311,837,837 | |
Deposits and Other Financial Instruments | 276,892,475 | 262,445,497 | 256,938,274 | 245,356,883 | |
Deposits | 17 | 117,268,106 | 104,576,178 | 117,145,684 | 105,332,878 |
Money Market Funding | 17 | 731,632 | 15,715,553 | 680,432 | 15,715,553 |
Local Borrowings | 17 | 18,395,544 | 3,707,117 | 18,395,544 | 3,707,117 |
Domestic Onlendings - Official Institutions | 17 | 7,348,759 | 7,466,070 | 7,348,759 | 7,466,070 |
Funds from Acceptance and Issuance of Securities | 17 | 94,502,759 | 86,967,036 | 74,722,180 | 67,799,380 |
Derivative Financial Instruments | 6 | 15,427,838 | 17,676,138 | 15,427,838 | 17,690,654 |
Other Financial Liabilities | 18.a | 23,217,837 | 26,337,405 | 23,217,837 | 27,645,231 |
Other Liabilities | 19 | 35,949,904 | 55,300,978 | 41,854,697 | 63,772,477 |
Provision for Tax Risks and Legal Obligations | 20.b | 4,579,072 | 4,224,532 | 6,955,297 | 6,577,554 |
Provision for Judicial and Administrative Proceedings - Labor and Civil Lawsuits | 20.b | 3,262,393 | 3,468,009 | 3,372,320 | 3,660,582 |
Other Provisions | 19 | 834,981 | 931,767 | 878,980 | 1,036,486 |
Others | 19 | 27,273,458 | 46,676,670 | 30,648,100 | 52,497,855 |
Deferred Tax Liabilities | 11 | 2,619,134 | 2,030,169 | 3,580,063 | 2,708,477 |
Deferred Income | - | 360,501 | - | 382,255 | |
Stockholders' Equity | 21 | 80,345,580 | 78,844,071 | 80,335,226 | 78,739,563 |
Capital | 21.a | 55,000,000 | 55,000,000 | 55,000,000 | 55,000,000 |
Capital Reserves | 21.c | 374,218 | 387,537 | 381,332 | 400,701 |
Profit Reserves | 21.c | 31,061,284 | 27,954,392 | 30,754,863 | 27,445,196 |
Adjustment to Fair Value | (4,966,859) | (3,784,819) | (4,677,906) | (3,393,295) | |
(-) Treasury Shares | 21.d | (1,123,063) | (713,039) | (1,123,063) | (713,039) |
Non Controlling Interest | 21.e | - | - | 1,398,928 | 1,257,244 |
Total Stockholders' Equity | 80,345,580 | 78,844,071 | 81,734,154 | 79,996,808 | |
Total Liabilities and Stockholders' Equity | 1,006,077,922 | 980,816,744 | 986,588,726 | 963,375,970 |
The accompanying notes from Management are an integral part of these financial statements.
Bank | Consolidated | ||||
Notes | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |
Income Related to Financial Operations | 37,482,298 | 25,092,779 | 42,399,620 | 30,253,142 | |
Loan Operations | 29,600,306 | 20,057,178 | 36,103,427 | 25,417,072 | |
Leasing Operations | - | - | 161,509 | 114,234 | |
Securities Transactions | 6.a.V | 9,490,666 | 3,014,908 | 6,290,572 | 1,780,397 |
Derivatives Transactions | (4,878,937) | 2,292,845 | (3,443,401) | 3,210,944 | |
Foreign Exchange Operations | 180,851 | (964,628) | 180,851 | (964,628) | |
Compulsory Deposits | 3,089,412 | 692,476 | 3,106,662 | 695,123 | |
Expenses on Financial Operations | (25,180,421) | (6,872,745) | (25,915,755) | (8,898,749) | |
Funding Operations Market | 17.b | (20,620,183) | (4,208,818) | (19,690,395) | (5,108,163) |
Borrowings and Onlendings Operations | 4,167,825 | 3,169,053 | 4,147,065 | 3,169,830 | |
Operations of Sale or Transfer of Financial Assets | 321,208 | 103,754 | 548,075 | 103,761 | |
Allowance for Loan Losses | 8.e | (9,049,271) | (5,936,734) | (10,920,500) | (7,064,177) |
Gross Income Related to Financial Operations | 12,301,877 | 18,220,034 | 16,483,865 | 21,354,393 | |
Other Operating Revenues (Expenses) | (3,331,099) | (5,581,545) | (5,551,206) | (7,528,126) | |
Banking Service Fees | 23 | 5,438,427 | 5,138,652 | 6,845,971 | 6,860,257 |
Income Related to Bank Charges | 23 | 2,323,917 | 2,342,439 | 2,653,135 | 2,691,467 |
Personnel Expenses | 24 | (3,133,906) | (2,973,558) | (3,843,763) | (3,485,775) |
Other Administrative Expenses | 25 | (6,178,695) | (6,715,375) | (6,248,771) | (7,045,077) |
Tax Expenses | (1,871,954) | (1,891,715) | (2,546,544) | (2,436,627) | |
Investments in Affiliates and Subsidiaries | 14.b | 2,454,165 | 1,959,333 | 43,400 | 28,566 |
Other Operating Revenues | 26 | 3,323,563 | 1,503,845 | 5,991,018 | 2,657,802 |
Other Operating Expenses | 27 | (5,686,616) | (4,945,166) | (8,445,652) | (6,798,739) |
Operating Income | 8,970,778 | 12,638,489 | 10,932,659 | 13,826,267 | |
Non-Operating Income | 28 | 402,729 | 52,584 | 416,272 | 28,077 |
Income Before Taxes on Income and Profit Sharing | 9,373,507 | 12,691,073 | 11,348,931 | 13,854,344 | |
Income Tax and Social Contribution | 11.c | (649,124) | (4,737,863) | (2,288,471) | (5,926,879) |
Provision for Income Tax | (436,809) | (2,634,890) | (1,472,885) | (3,499,625) | |
Provision for Social Contribution Tax | (325,868) | (2,181,006) | (865,284) | (2,626,205) | |
Deferred Tax Credits | 113,553 | 78,033 | 49,698 | 198,951 | |
Profit Sharing | (947,998) | (858,133) | (1,039,055) | (940,467) | |
Non Controlling Interest | 21.e | - | - | (98,716) | (67,918) |
Net Income | 7,776,385 | 7,095,077 | 7,922,689 | 6,919,080 | |
Number of Shares (Thousands) | 21.a | 7,442,979 | 7,467,021 | ||
$) | 1,044.79 | 950.19 |
The accompanying notes from Management are an integral part of these financial statements.
Statement of Comprehensive Income
Bank | Consolidated | |||
01/01 to | 01/01 to | 01/01 to | 01/01 to | |
Profit for the Period | 7,776,385 | 7,095,077 | 7,922,689 | 6,919,080 |
Other Comprehensive Income that will be subsequently reclassified for profit or loss when specific conditions are met: | (1,318,082) | (1,588,342) | (1,420,653) | (1,601,640) |
Available-for-sale financial assets | (800,766) | (1,056,200) | (903,337) | (1,069,498) |
Own Available-for-sale financial assets | (1,278,274) | (1,721,235) | (1,592,717) | (1,926,517) |
Related Companies | (120,570) | (186,599) | - | - |
Income taxes | 598,078 | 851,634 | 689,380 | 857,019 |
Cash flow hedges | (517,316) | (532,142) | (517,316) | (532,142) |
Own Cash flow hedges | (749,013) | (655,505) | (873,528) | (846,891) |
Related Companies | (124,515) | (191,386) | - | - |
Income taxes | 356,212 | 314,749 | 356,212 | 314,749 |
Other Comprehensive Income that won't be reclassified for Net income: | 136,042 | 124,641 | 136,042 | 124,641 |
Defined Benefits plan | 136,042 | 124,641 | 136,042 | 124,641 |
Defined Benefits plan | 322,083 | 264,348 | 322,083 | 264,348 |
Income taxes | (186,041) | (139,707) | (186,041) | (139,707) |
Comprehensive Income for the Period | 6,594,345 | 5,631,376 | 6,638,078 | 5,442,081 |
Attributable to parent company | 6,539,362 | 5,374,163 | ||
Attributable to non-controlling interests | 98,716 | 67,918 | ||
Total | 6,638,078 | 5,442,081 |
The accompanying notes from Management are an integral part of these financial statements.
Statements of Changes in Stockholders' Equity – Bank
Profit Reserves | Adjustment to Fair Value |
| |||||||||||||||||||
Notes | Capital | Capital Reserves | Legal Reserve | Reserve for Dividend Equalization | Own Position | Affiliates and Subsidiaries | Others Adjustment to Fair Value | Retained Earnings | (-)Treasury Shares | Total | |||||||||||
Balances as of december 31, 2020 | 57,000,000 | 302,665 | 4,520,871 | 18,607,926 | 2,596,867 | 124,185 | (3,178,279) | - | (791,358) | 79,182,877 | |||||||||||
Employee Benefit Plans | - | - | - | - | - | - | 124,641 | - | - | 124,641 | |||||||||||
Treasury Shares | 21.d | - | - | - | - | - | - | - | - | 81,588 | 81,588 | ||||||||||
Result of Treasury Shares | - | 40,582 | - | - | - | - | - | - | - | 40,582 | |||||||||||
Reservations for Share - Based Payment |
| - | (70,111) | - | - | - | - | - | - | - | (70,111) | ||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
| - | - | - | - | (1,221,525) | (366,817) | - | - | - | (1,588,342) | ||||||||||
Spin-off | 21.a | (2,000,000) | - | - | (527,444) | - | - | - | - | - | (2,527,444) | ||||||||||
Net Income | - | - | - | - | - | - | - | 7,095,077 | - | 7,095,077 | |||||||||||
Allocations: | |||||||||||||||||||||
Legal Reserve | 21.c | - | - | 354,754 | - | - | - | - | (354,754) | - | - | ||||||||||
Dividends | 21.b | - | - | - | (2,800,000) | - | - | - | (200,000) | - | (3,000,000) | ||||||||||
Reserve for Dividend Equalization | 21.c | - | - | - | 6,540,323 | - | - | - | (6,540,323) | - | - | ||||||||||
Balances as of june 30, 2021 | 55,000,000 | 273,136 | 4,875,625 | 21,820,805 | 1,375,342 | (242,632) | (3,053,638) | - | (709,770) | 79,338,868 | |||||||||||
Changes in the Semester | (2,000,000) | (29,529) | 354,754 | 3,212,879 | (1,221,525) | (366,817) | 124,641 | - | 81,588 | 155,991 | |||||||||||
Balances as of december 31, 2021 |
| 55,000,000 | 387,537 | 5,270,647 | 22,683,745 | (388,281) | (472,315) | (2,924,223) | - | (713,039) | 78,844,071 | ||||||||||
Employee Benefit Plans | - | - | - | - | - | - | 136,042 | - | - | 136,042 | |||||||||||
Treasury Shares | 21.d | - | - | - | - | - | - | - | - | (410,024) | (410,024) | ||||||||||
Result of Treasury Shares | - | 18,496 | - | - | - | - | - | - | - | 18,496 | |||||||||||
Reservations for Share - Based Payment |
| - | (31,815) | - | - | - | - | - | - | - | (31,815) | ||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
| - | - | - | - | (1,072,998) | (245,084) | - | - | - | (1,318,082) | ||||||||||
Prescribed Dividends | - | - | - | 30,510 | - | - | - | - | - | 30,510 | |||||||||||
Net Income | - | - | - | - | - | - | - | 7,776,385 | - | 7,776,385 | |||||||||||
Allocations: | |||||||||||||||||||||
Legal Reserve | 21.c | - | - | 388,819 | - | - | - | - | (388,820) | - | - | ||||||||||
Dividends | 21.b | - | - | - | (1,300,000) | - | - | - | (700,000) | - | (2,000,000) | ||||||||||
Interest on Capital | 21.b | - | - | - | - | - | - | - | (2,700,000) | - | (2,700,000) | ||||||||||
Reserve for Dividend Equalization | 21.c | - | - | - | 3,987,563 | - | - | - | (3,987,563) | - | - | ||||||||||
Balances as of june 30, 2022 | 55,000,000 | 374,218 | 5,659,466 | 25,401,818 | (1,461,279) | (717,399) | (2,788,181) | - | (1,123,063) | 80,345,580 | |||||||||||
Changes in the Semester | - | (13,319) | 388,819 | 2,718,073 | (1,072,998) | (245,084) | 136,042 | - | (410,024) | 1,501,509 |
Management's explanatory notes are an integral part of the financial statements.
Statements of Changes in Stockholders' Equity – Consolidated
Profit Reserves | Adjustment to Fair Value |
|
|
| |||||||||||||||||||||
Notes | Capital | Capital Reserves | Legal Reserve | Reserve for Dividend Equalization | Own Position | Affiliates and Subsidiaries | Others Adjustment to Fair Value | Retained Earnings | (-)Treasury Shares | Stockholders' Equity | Minority Interest | Total Stockholders' Equity | |||||||||||||
Balances as of december 31, 2020 | 57,000,000 | 298,313 | 4,520,872 | 17,990,263 | 3,004,187 | 124,186 | (3,178,280) | - | (791,358) | 78,968,183 | 1,150,708 | 80,118,891 | |||||||||||||
Employee Benefit Plans | - | - | - | - | - | - | 124,641 | - | - | 124,641 | - | 124,641 | |||||||||||||
Treasury Shares | 21.d | - | 40,582 | - | - | - | - | - | - | 81,588 | 122,170 | - | 122,170 | ||||||||||||
Reservations for Share - Based Payment |
| - | (73,111) | - | - | - | - | - | - | - | (73,111) | - | (73,111) | ||||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | (1,231,063) | (370,577) | - | - | - | (1,601,640) | - | (1,601,640) | |||||||||||||
Spin-off | 21.a | (2,000,000) | - | - | (527,444) | - | - | - | - | - | (2,527,444) | - | (2,527,444) | ||||||||||||
Net Income | - | - | - | - | - | - | - | 6,919,080 | - | 6,919,080 | - | 6,919,080 | |||||||||||||
Allocations: | |||||||||||||||||||||||||
Legal Reserve | 21.c | - | - | 345,954 | - | - | - | - | (345,954) | - | - | - | - | ||||||||||||
Dividends | 21.b | - | - | - | (2,800,000) | - | - | - | (200,000) | - | (3,000,000) | - | (3,000,000) | ||||||||||||
Reserve for Dividend Equalization | 21.c | - | - | - | 5,847,526 | - | - | - | (5,847,526) | - | - | - | - | ||||||||||||
Unrealized Profit | - | - | - | 525,600 | - | - | - | (525,600) | - | - | - | - | |||||||||||||
Non Controlling Interest Results | 21.e | - | - | - | - | - | - | - | - | - | - | 67,918 | 67,918 | ||||||||||||
Others | - | - | - | 92,490 | - | - | - | - | - | 92,490 | 78,537 | 171,027 | |||||||||||||
Balances as of june 30, 2021 | 55,000,000 | 265,784 | 4,866,826 | 21,128,435 | 1,773,124 | (246,391) | (3,053,639) | - | (709,770) | 79,024,369 | 1,297,163 | 80,321,532 | |||||||||||||
Changes in the Semester | (2,000,000) | (32,529) | 345,954 | 3,138,172 | (1,231,063) | (370,577) | 124,641 | - | 81,588 | 56,186 | 146,455 | 202,641 |
Profit Reserves | Adjustment to Fair Value |
|
|
| |||||||||||||||||||||
Notes | Capital | Capital Reserves | Legal Reserve | Reserve for Dividend Equalization | Own Position | Affiliates and Subsidiaries | Others Adjustment to Fair Value | Retained Earnings | (-)Treasury Shares | Stockholders' Equity | Minority Interest | Total Stockholders' Equity | |||||||||||||
Balances as of december 31, 2021 |
| 55,000,000 | 400,701 | 5,270,258 | 22,174,938 | 3,242 | (472,314) | (2,924,223) | - | (713,039) | 78,739,563 | 1,257,244 | 79,996,808 | ||||||||||||
Employee Benefit Plans | - | - | - | - | - | - | 136,042 | - | - | 136,042 | - | 136,042 | |||||||||||||
Treasury Shares | 21.d | - | 18,496 | - | - | - | - | - | - | (410,024) | (391,528) | - | (391,528) | ||||||||||||
Reservations for Share - Based Payment | - | (37,865) | - | - | - | - | - | - | - | (37,865) | - | (37,865) | |||||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | (1,175,569) | (245,084) | - | - | - | (1,420,653) | - | (1,420,653) | |||||||||||||
Prescribed Dividends | - | - | - | 30,510 | - | - | - | - | - | 30,510 | - | 30,510 | |||||||||||||
Net Income | - | - | - | - | - | - | - | 7,922,689 | - | 7,922,689 | - | 7,922,689 | |||||||||||||
Allocations: | |||||||||||||||||||||||||
Legal Reserve | 21.c | - | - | 396,134 | - | - | - | - | (396,134) | - | - | - | - | ||||||||||||
Dividends | 21.b | - | - | - | (1,300,000) | - | - | - | (700,000) | - | (2,000,000) | - | (2,000,000) | ||||||||||||
Interest on Capital | 21.b | - | - | - | - | - | - | - | (2,700,000) | - | (2,700,000) | - | (2,700,000) | ||||||||||||
Reserve for Dividend Equalization | 21.c | - | - | - | 4,126,555 | - | - | - | (4,126,555) | - | - | - | - | ||||||||||||
Unrealized Profit | - | - | - | 68,060 | - | - | - | - | - | 68,060 | - | 68,060 | |||||||||||||
Non Controlling Interest Results | 21.e | - | - | - | - | - | - | - | - | - | - | 98,716 | 98,716 | ||||||||||||
Others | - | - | - | (11,592) | - | - | - | - | - | (11,592) | 42,968 | 31,376 | |||||||||||||
Balances as of june 30, 2022 | 55,000,000 | 381,332 | 5,666,392 | 25,088,471 | (1,172,327) | (717,398) | (2,788,181) | - | (1,123,063) | 80,335,226 | 1,398,928 | 81,734,154 | |||||||||||||
Changes in the Semester | - | (19,369) | 396,134 | 2,913,533 | (1,175,569) | (245,084) | 136,042 | - | (410,024) | 1,595,663 | 141,684 | 1,737,346 |
Management's explanatory notes are an integral part of the financial statements.
Bank | Consolidated | ||||
01/01 to 06/30/2022 | 01/01 to 06/30/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | ||
Notes | |||||
Operational Activities | |||||
Net Income | 7,776,385 | 7,095,077 | 7,922,689 | 6,919,080 | |
Adjustment to Net Income | 14,422,743 | 57,332,110 | 19,045,195 | 60,657,215 | |
Allowance for Loan Losses | 8.e | 9,049,271 | 5,936,734 | 10,920,500 | 7,064,177 |
Provision for Legal Proceedings and Administrative and Legal Obligations | 20.c | 679,541 | 682,691 | 881,828 | 748,235 |
Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations | 20.c | 391,611 | 256,714 | 462,326 | 281,504 |
Deferred Tax | 155,461 | 444,203 | 23,461 | 441,755 | |
Equity in Affiliates and Subsidiaries | 14.b | (2,454,165) | (1,959,333) | (43,400) | (28,566) |
Depreciation and Amortization | 25 | 1,383,415 | 2,289,078 | 1,474,746 | 2,413,988 |
Recognition (Reversal) Allowance for Non-financial Assets Held for Sale | 28 | (3,957) | 18,008 | (19,134) | 12,901 |
Gain (Loss) on Sale of Non-financial Assets Held for Sale | 28 | (50,628) | (48,891) | (32,471) | (45,565) |
Gain (Loss) on Sale of Investments | 28 | - | - | - | 59 |
Provision for Financial Guarantees | 26 | (244,928) | (89,156) | (301,314) | (106,148) |
Monetary Adjustment of Escrow Deposits | - | 68,864 | - | 68,864 | |
Recoverable Taxes | 26 | (180,217) | (147,406) | (276,717) | (155,573) |
Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents | (983) | (5,325) | (983) | (5,325) | |
Effects of Changes in Foreign Exchange Rates on Assets and Liabilities | 5,677,027 | 49,872,057 | 5,677,027 | 49,872,057 | |
Others | 21,295 | 13,872 | 279,326 | 94,852 | |
Changes on Assets and Liabilities | (27,774,251) | (59,342,287) | (46,894,499) | (59,265,674) | |
Decrease (Increase) in Interbank Investments | (3,697,314) | 24,164,722 | (7,400,668) | 29,564,425 | |
Decrease (Increase) in Securities and Derivative Financial Instruments | 6,228,674 | 11,899,979 | 4,393,567 | 9,409,958 | |
Decrease (Increase) in Lending and Leasing Operations | (11,532,873) | (26,398,275) | (13,493,797) | (31,086,826) | |
Decrease (Increase) in Others - Provisions for Expected Losses Associated with Credit Risk | (482,338) | 398,725 | (454,876) | 182,328 | |
Decrease (Increase) in Deposits on Central Bank of Brazil | 2,470,793 | (2,639,646) | 2,508,737 | (2,665,608) | |
Decrease (Increase) in Other Financial Assets | 134,797,423 | 40,565,614 | 134,744,679 | 35,701,416 | |
Decrease (Increase) in Prepaid Expenses | (864,180) | (261,970) | (906,628) | (155,289) | |
Decrease (Increase) in Other Assets | 3,080,106 | (3,114,243) | 1,690,462 | 2,703,510 | |
Decrease (Increase) in Current Tax Assets | (984,433) | 2,366,328 | (1,661,773) | 3,285,874 | |
Net Change on Other Interbank and Interbranch Accounts | (3,492,161) | (5,206,070) | (3,471,454) | 9,700,910 | |
Increase (Decrease) in Deposits | 9,058,690 | 8,958,711 | 11,467,502 | 8,535,789 | |
Increase (Decrease) in Money Market Funding | 3,494,118 | (32,544,712) | (5,543,621) | (31,549,219) | |
Increase (Decrease) in Borrowings | (3,576,025) | 7,324,629 | (3,557,715) | 7,284,829 | |
Increase (Decrease) in Other Financial Liabilities | (135,650,257) | (91,220,591) | (135,547,475) | (85,947,362) | |
Increase (Decrease) in Other Liabilities | (26,407,350) | 2,476,936 | (29,185,511) | (17,931,548) | |
Increase (Decrease) in Current Tax Liabilities | 474,750 | 4,944,128 | 2,092,233 | 6,173,559 | |
Increase (Decrease) in Change in Deferred Income | (360,501) | 64,889 | (382,255) | 58,659 | |
Income Tax Recovered/(Paid) | (331,373) | (1,121,441) | (2,185,906) | (2,531,079) | |
Net Cash Provided by (Used in) Operational Activities | (5,575,123) | 5,084,900 | (19,926,615) | 8,310,621 | |
Investing Activities | |||||
Capital Increase in Equity in Affiliates and Subsidiaries | (10,600,000) | - | - | - | |
Acquisition of Residual Minority Interest in Subsidiary | (365,108) | (600,000) | (395,316) | (18,664) | |
Acquisition of Other Investments | (33) | - | (1,582) | - | |
Purchase of Fixed Assets | (365,937) | (374,469) | (441,107) | (387,139) | |
Purchase and Disposal of Intangible Assets | (482,409) | 936,500 | (662,213) | 723,373 | |
Disposal of Interests in Affiliates and Subsidiaries | 38,491 | 876,065 | - | - | |
Dividends and Interest on Capital Received | 285,331 | - | 40,548 | 39,612 | |
Disposal of Non-Financial Assets Held for Sale | 318,439 | 343,668 | 327,520 | 354,469 | |
Disposal of Fixed Assets | 514,856 | 23,634 | 538,237 | 573,482 | |
Net Cash Provided by (Used in) Investing Activities | (10,656,370) | 1,205,398 | (593,913) | 1,285,133 | |
Financing Activities | |||||
Purchase and Alienation of Own Share | 21.d | (410,024) | 81,588 | (410,024) | 81,588 |
Issuance of Long - Term Emissions | 39,880,014 | 56,264,246 | 46,980,649 | 53,546,544 | |
Long - Term Payments | (2,711,601) | (46,964,881) | (5,999,778) | (47,732,251) | |
Dividends and Interest on Capital Paid | (4,272,323) | (4,057,853) | (4,302,821) | (4,115,414) | |
Increase (decrease) in Minority Interest | - | - | 61,794 | - | |
Net Cash Provided by (Used in) Financing Activities | 32,486,066 | 5,323,100 | 36,329,820 | 1,780,467 | |
Exchange Variation on Cash and Cash Equivalents | 983 | 5,325 | 983 | 5,325 | |
Increase (Decrease) in Cash and Cash Equivalents | 16,255,556 | 11,618,723 | 15,810,275 | 11,381,546 | |
Cash and Cash Equivalents at the Beginning of period | 4 | 34,297,636 | 29,191,171 | 33,650,339 | 28,999,315 |
Cash and Cash Equivalents at the End of period | 4 | 50,553,192 | 40,809,894 | 49,460,614 | 40,380,861 |
The explanatory notes are an integral part of the condensed consolidated financial statements.
Bank | Consolidated | |||||||||||||||
01/01 to 06/30/2022 | 01/01 to 06/30/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |||||||||||||
Notes | ||||||||||||||||
Income Related to Financial Operations | 37,482,298 | 25,092,779 | 42,399,620 | 30,253,142 | ||||||||||||
Income Related to Bank Charges and Banking Service Fees | 23 | 7,762,344 | 7,481,091 | 9,499,106 | 9,551,724 | |||||||||||
Allowance for Loans Losses | 8.e | (9,049,271) | (5,936,734) | (10,920,500) | (7,064,177) | |||||||||||
Other Revenues and Expenses | (1,960,324) | (3,388,737) | (2,038,362) | (4,112,860) | ||||||||||||
Financial Expenses | (17,026,490) | (841,324) | (15,992,041) | (1,678,175) | ||||||||||||
Third-party Input | (4,352,905) | (4,031,153) | (4,325,963) | (4,232,884) | ||||||||||||
Materials, Energy and Others | (181,538) | (129,235) | (194,907) | (137,879) | ||||||||||||
Third-Party Services | 25 | (1,163,206) | (1,071,342) | (1,150,924) | (1,268,193) | |||||||||||
Others | (3,008,161) | (2,830,576) | (2,980,132) | (2,826,812) | ||||||||||||
Gross Added Value | 12,855,652 | 18,375,922 | 18,621,860 | 22,716,770 | ||||||||||||
Retentions | ||||||||||||||||
Depreciation and Amortization | 25 | (1,383,415) | (2,289,078) | (1,474,746) | (2,413,988) | |||||||||||
Added Value Produced Net | 11,472,237 | 16,086,844 | 17,147,114 | 20,302,782 | ||||||||||||
Added Value Received in Transfer of Equity Income in Affiliates and Subsidiaries | 14.b | 2,454,165 | 1,959,333 | 43,400 | 28,566 | |||||||||||
Added Value to Distribute | 13,926,402 | 18,046,177 | 17,190,514 | 20,331,348 | ||||||||||||
Added Value Distribution | ||||||||||||||||
Employee | 3,653,660 | 26.3% | 3,446,718 | 19.1% | 4,339,926 | 25.2% | 3,978,470 | 19.6% | ||||||||
Compensation | 24 | 1,910,919 | 1,699,140 | 2,228,729 | 1,958,920 | |||||||||||
Benefits | 24 | 591,128 | 594,143 | 791,426 | 706,617 | |||||||||||
Government Severance Indemnity Funds for Employees - FGTS | 196,765 | 162,531 | 248,622 | 192,968 | ||||||||||||
Others | 954,848 | 990,904 | 1,071,149 | 1,119,965 | ||||||||||||
Taxes and Contributions | 2,053,982 | 14.7% | 7,109,238 | 39.4% | 4,381,121 | 25.5% | 8,967,675 | 44.1% | ||||||||
Federal | 1,694,157 | 6,754,897 | 3,921,506 | 8,521,200 | ||||||||||||
State | 280 | 336 | 427 | 376 | ||||||||||||
Municipal | 359,545 | 354,005 | 459,187 | 446,099 | ||||||||||||
Compensation of Third-Party Capital - Rental | 25 | 442,375 | 3.2% | 395,144 | 2.2% | 448,062 | 2.6% | 398,205 | 2.0% | |||||||
Remuneration of Interest on Capital |
| 7,776,385 | 55.8% | 7,095,077 | 39.3% | 8,021,405 | 46.7% | 6,986,998 | 34.4% | |||||||
Dividends | 21.b | 2,000,000 | 3,000,000 | 2,000,000 | 3,000,000 | |||||||||||
Interest on Equity | 21.b | 2,700,000 | - | 2,700,000 | - | |||||||||||
Profit Reinvestment |
| 3,076,385 | 4,095,077 | 3,420,121 | 4,054,916 | |||||||||||
Participation Results of Non-Controlling Stockholders | 21.e | - | - | (98,716) | (67,918) | |||||||||||
Total | 13,926,402 | 100.0% | 18,046,177 | 100.0% | 17,190,514 | 100.0% | 20,331,348 | 100.0% |
Banco Santander (Brasil) S.A. (Banco Santander or Banco), controlled directly and indirectly by Banco Santander, S.A., based in Spain (Banco Santander Spain), is the leading institution of the Financial and Prudential Conglomerate (Santander Conglomerate) before the Central Bank of Brazil (Bacen), constituted in the form of a stock company, established on Avenida Presidente Juscelino Kubitschek, 2041, Cj. 281, Block A, Cond. Wtorre JK - Vila Nova Conceição - São Paulo - SP. Banco Santander operates as a multiple bank and develops its operations through commercial, investment, credit, financing and investment, real estate credit, leasing and foreign exchange portfolios. Through controlled companies, it also operates in the markets of payment institution, consortium administration, securities brokerage, insurance brokerage, consumer financing, digital platforms, benefits management, management and recovery of unperformed credits, capitalization and private pension, and supply and administration of food, meal and other vouchers. The operations are conducted in the context of a set of institutions that operate integratedly in the financial market. The benefits and costs corresponding to the services provided are absorbed between them and are carried out in the normal course of business and under commutative conditions.
2. Presentation of Financial Statements
Banco Santander's individual and consolidated financial statements, which include its foreign subsidiaries (Banco) and consolidated statements, were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, together with the rules of the National Monetary Council (CMN), 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 Bacen and evidence all relevant information specific to the financial statements, which are consistent with those used by the Administration in its management.
CMN Resolution No. 4,818/2020 and BCB Resolution No. 2/2020 establish the general criteria and procedures for the preparation and disclosure of the Financial Statements. BCB Resolution No. 2/2020 repealed Bacen Circular No. 3,959/2019, and entered into force from January 1, 2021 and was applicable in the preparation, disclosure and remittance of Financial Statements. That rule, among other requirements, determined the evidence in a segregated explanatory note of the recurrent and non-recurring results see note 32.h.
On May 27, 2021, CMN Resolution No. 4,911 was published, which became effective on January 1, 2022 and proposed changes to the documents and disclosures to be made, with the extinction and amendment of the following documents:
· Trial Balance and Balance Sheet - headquarters and dependence (documents 4020 and 4026);
· Analytical Balance Sheet - Consolidated Position of Branches and Equity Interests Abroad (document 4343);
· Balance Sheet and Balance Sheet of the Financial Conglomerate (documents 4040 and 4046);
· Analytical Balance Sheet - Individual Position of Equity Interest Abroad (document 4313) will be simplified;
· Prudential Conglomerate Financial Statements with Explanatory Notes / Auditor's Opinion.
The resolution maintains the obligation to publish documents:
· Analytical Balance Sheet – Prudential Conglomerate, monthly (CADOC 4060);
· Balance Sheet – Prudential Conglomerate, semiannually (CADOC 4066), for the base dates of June 30 and December 31; and
· Report of the Prudential Conglomerate, semiannually, for the base dates of June 30th and December 31st (which will still be the object of further details by the regulator).
In November2021,CMNResolutionNo.4,966was published,which deals withaccountingconceptsandcriteriaapplicabletofinancialinstruments,aswellasfor thedesignationandrecognitionofprotectionrelationships (hedgeaccounting)seekingtheconvergenceoftheCOSIFaccounting criterion for the requirements of the internationalstandardofIFRS9.TheResolutionentersintoforceon January 1,2025,andBancoSantander,together with themarketand the CentralBank,has already initiated the impact assessmentsandchangesnecessarytomeetits implementationand on theidentificationandtreatmentofexpectedimpacts.
CMN ResolutionNo.4,967,whichwaspublishedinNovember 2021,determinescriteria fortherecognition,accountingand disclosureofinvestmentpropertiesandnon-financialassetsacquiredforthepurposeoffuturesellingandgeneratingprofitsbasedonchangesintheirmarketprices,theResolutionentered intoforceon January 1,2022.BancoSantanderhasevaluatedandalreadyadoptstheestablishedprocedures.
Resolution CMN No. 4,975was published by the Central Bank of Brazilin December2021,establishingcompliancewiththeTechnicalPronouncementoftheAccounting PronouncementsCommittee(CPC)06(R2)–Leases,inthe recognition,measurement,presentationanddisclosureof leasingoperations,andwhichcomesintoforce on January 1, 2025. Banco Santanderhasinitiatedtheimpactassessmentsandchangesthatwillbeduetosuittheresolutionrequirements.
The individualandconsolidatedfinancialstatementsincludetheBankanditssubsidiariesandtheinvestmentfundsindicatedinNote14,wheretheSantanderconglomeratecompaniesarethemainbeneficiariesor holdersofthemainobligations.Theportfoliosoftheseinvestmentfundsareclassifiedbytransactiontypeandaredistributedinthesamecategoriesinwhichtheywereoriginallyallocated.
In the preparationoftheindividualandconsolidatedfinancial statements,the equityinterests,the relevantbalancespayableand payable,therevenuesandexpenses arisingfromtransactionsbetweendependenciesinthecountry,dependenceontheoutsideandcontrolled,theresultsnotrealizedbetweenthesecompanies and highlightedtheparticipation ofminorityshareholdersinshareholders'equityandincome.
The preparation of the financial statements requires the adoption of estimates by the Management, impacting certain assets and liabilities, disclosures on provisions and contingent liabilities and revenues and expenses in the periods demonstrated. Since the management's judgment involves estimates regarding the probability of future events occurring, the actual amounts may differ from these estimates, the main ones being provision for expected losses associated with credit risk, realization of deferred tax assets, provision for legal, civil, tax and labor proceedings, pension plan and fair value of financial assets.
The Board of Directors authorized the issuance of the individual and consolidated financial statements for the six months ended June 30, 2022, at the meeting held on July 27, 2022.
The Condensed Consolidated Interim Financial Statements prepared on the basis of the international accounting standard issued by the International Accounting Standards Board (IASB) for the year ended June 30, 2022, will be disclosed, within the legal period, at the www.santander.com.br/ri.
3. Significant Accounting Policies
a) Calculation of the result
The accounting method for calculating the result is on an accrual basis and considers income, charges and monetary or exchange variations, calculated at official indices or rates, pro rata day levied on assets and liabilities restated up to the balance sheet date.
b) Functional Currency
Functional Currency and Presentation Currency
CMN Resolution No. 4,524 of September 29, 2016, with prospective application from January 1, 2017, started to establish accounting procedures for recognition by financial institutions and other institutions authorized to operate by Bacen that hold investments abroad: I - the effects of exchange variations resulting from the conversion of transactions carried out in foreign currency by investees abroad into the respective functional currencies; II - the effects of exchange variations resulting from the conversion of the balances of the financial statements of investees abroad from the respective functional currencies to the national currency; and III - operations with the purpose of hedging the exchange variation of investments abroad. These changes did not impact Banco Santander's financial statements in 2020. The functional currency is the currency of the main economic environment in which the entity operates.
The financial statements are presented in Reais, the functional and presentation currency of Banco Santander and its subsidiaries, including its subsidiary and foreign branches.
The assets and liabilities of the foreign branches and subsidiary are translated into Real as follows:
• Assets and liabilities are translated at the exchange rate on the balance sheet date; and
• Income and expenses are converted at the monthly average exchange rate.
c) Current and Long-Term Assets and Liabilities
They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis and, when applicable, the effect of adjustments to reduce the cost of assets at their market value (fair value) or realization.
Receivables and payables within 12 months are classified in current assets and liabilities, respectively. Securities classified as trading securities, regardless of their maturity date, are fully classified in current assets, as established by Bacen Circular 3068/2001.
d) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash equivalents correspond to the balances of interbank investments with immediate convertibility, subject to an insignificant risk of change in value and with an original term equal to or less than ninety days.
e) Interbank investments of liquidity and interest-bearing credits linked to Bacen
They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis.
e.1) Repo Transactions
Sale with Repurchase Agreement
Own fixed-income securities used to back repurchase agreements are highlighted in specific asset accounts (restricted securities) on the transaction date, at the updated average book value, by type and maturity of the security. The difference between the repurchase and sale amounts represents the transaction expense.
The Bank also uses third-party guarantees to raise funds in sales operations with a repurchase agreement, such funding is recorded as a financed position.
Purchase with Resale Commitment
Financing granted based on fixed income securities (from third parties) are recorded in the bank position at the settlement value. The difference between the resale and purchase values represents the transaction income. Securities acquired with resale commitment are transferred to the financed position when used to back sales transactions with repurchase commitment.
Repurchase Transactions carried out with Free Movement Agreement
For operations with a free movement clause, at the time of the definitive sale of the securities acquired with a resale commitment, the liability related to the obligation to return the security must be evaluated at the security's market value.
f) Bonds and Securities
The securities portfolio is demonstrated, in accordance with Circular No. 3,068,/2001 by the following accounting registration and evaluation criteria:
I - trading securities;
II - securities available for sale; and
III - securities held to maturity.
The securities for trading category include securities acquired for the purpose of being actively and frequently traded, and held-to-maturity securities are those for which the Bank has the intention and financial capacity to keep them in the portfolio until the Due date. In the available-for-sale securities category, securities that do not fit into categories I and III are recorded. Securities classified in categories I and II are stated at acquisition value plus income earned up to the balance sheet date, calculated on a daily pro rata basis, adjusted to market value (fair value), accounting for appreciation or devaluation arising from such adjustment in return:
(1) the appropriate income or expense account, net of tax effects, in the income for the period, when related to securities classified in the securities for trading category; and
(2) from the separate shareholders' equity account, net of tax effects, when related to securities classified in the available-for-sale securities category. Adjustments to market value (fair value) made on the sale of these securities are transferred to profit or loss for the period.
Securities classified in the held-to-maturity category are stated at acquisition value plus income earned through the balance sheet date, calculated on a daily pro rata basis.
Permanent losses in the realizable value of securities classified in the available-for-sale and held-to-maturity categories are recognized in profit or loss for the period.
g) Derivative Financial Instruments
According to Circular No. 3082/2002 of the Central Bank, derivative financial instruments are classified according to Management's intention to use them as instruments intended for hedging or not. Transactions carried out at the request of customers, on their own account, or that do not meet the criteria for hedging accounting, mainly derivatives used in the management of global risk exposure, are recorded at market value, with realized and unrealized gains and losses. , recognized in profit or loss for the period.
Derivative financial instruments designated as part of a risk protection structure (hedge) can be classified as follows:
I - market risk hedge; and
II - cash flow hedge.
Derivative financial instruments intended for hedging and the respective hedge objects are adjusted to market value, observing the following:
(1) for those classified in category I, the appreciation or devaluation is recorded in contra-entry 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 appreciation or devaluation of the effective portion is recorded as a contra entry to the separate equity account, net of tax effects.
Some hybrid financial instruments are composed of a derivative financial instrument and a non-derivative asset or liability. In these cases, the derivative financial instrument represents an embedded derivative. Embedded derivatives are recorded separately in relation to the contract to which they are linked.
We do not have net investment hedge operations in foreign operations as defined in CMN Resolution No. 4,524/2016, as we do not hold investments abroad in a functional currency other than the Brazilian real.
h) Loan Portfolio and Provision for Expected Losses Associated with Credit Risk
The credit portfolio includes credit operations, leasing operations, advances on foreign exchange contracts and other credits with credit concession characteristics. It is stated at its present value, considering the indexes, interest rate and agreed charges, calculated pro rata day up to the balance sheet date. For operations overdue after 60 days, the recognition in revenue will only occur when they are actually received.
Normally, the Bank writes off loans for losses when they are overdue for more than 360 days. In the case of long-term credit operations (over 3 years), they are written off when they are 540 days past due. The credit operation written off as a loss is recorded in a memorandum account for a minimum period of 5 years and while all collection procedures are not exhausted.
Credit assignments without risk retention result in the write-off of the financial assets object of the operation, which are then kept in a memorandum account. The result of the assignment is fully recognized upon realization.
As of January 2012, as determined by CMN Resolution No. 3,533/2008 and CMN Resolution No. 3,895/2010, all credit assignments with substantial risk retention will have their results recognized for the remaining terms of the operations, and financial assets Assignment objects remain recorded as credit operations and the amount received as obligations for sales or transfer of financial assets.
Provisions for loan operations are based on the analysis of outstanding loan operations (due and due), on past experience, future expectations and specific risks of the portfolios and on Management's risk assessment policy in the constitution of provisions, as established by the CMN Resolution No. 2,682/1999.
CMN Resolution No. 4,855 of September 24, 2020, which came into force on January 1, 2021, determines that, for the criteria for the provision of operations carried out within the scope of programs instituted with the purpose of facing the effects of the pandemic of COVID-19 in the economy, in which resources or risks are shared between the Federal Government and the participating institutions or a guarantee provided by the Federal Government, the percentages defined in Resolution No. credit risk is held by the institution. In cases of transfer for loss, the amount taken to offset accounts must be 100% of the balance of the operation.
h.1 Credit Operation Restructuring
CMN Resolution 4,803, later amended by CMN Resolution No. 4,855 mentioned above, allowed Financial Institutions to reclassify to the level at which they were classified on February 29, 2020, operations renegotiated between March 1 and December 31, 2020, not including those operations with a delay of fifteen days or more on February 29, 2020 and that present evidence of inability to honor the obligation under the new agreed conditions.
i) Non-Current Assets Held for Sale and Other Values and Assets
Non-current assets held for sale include the book value of individual items, disposal groups or items that are part of a business unit destined for disposal (discontinued operations), whose sale in their current condition is highly probable and whose occurrence is expected for within a year.
Other amounts and assets refer mainly to assets not for own use, basically consisting of real estate and vehicles received as payment.
Non-current assets held for sale and assets not for own use are generally recorded at the lower of fair value less cost to sell and book value on the date they are classified in this category and are not depreciated.
j) Prepaid Expenses
Investments of resources in prepayments are accounted for, whose benefits or services will occur in subsequent years and are allocated to income, in accordance with the term of the respective contracts.
j.1) Commissions Paid to Bank Correspondents
Considering what is contained in CMN Resolution No. 4,294 and Bacen Circular No. 3,693 of December 2013, as of January 2015, commissions paid to intermediary agents for the origination of new credit operations are limited to the maximum percentages of (i) 6% of the value of the new originated operation and (ii) 3% of the value of the operation subject to portability.
These fees must be fully recognized as an expense when incurred.
k) Investments
Investments in associated and controlled companies are initially recognized at their acquisition cost, and subsequently valued using the equity method and the results are recognized in the result of interest in affiliates and subsidiaries. Other investments are stated at cost, reduced to recoverable value, when applicable.
Change in the Scope of Consolidation – Consists of the sale, acquisition or change in control of a specific investment.
CMN Resolution No. 4,817/2020, which deals with criteria for accounting measurement and recognition of investments in associates, controlled companies and jointly controlled companies, the main change brought about is the extinction of the COSIF "Shares and quotas" of the investment group, passing these to be treated as Bonds and Securities, the resolution becomes effective in January 2022 and Banco Santander continues to assess impacts and necessary changes, with no expectation of material impacts from this change.
l) Fixed Assets
It is stated at acquisition cost, net of the respective accumulated depreciation and is subject to the assessment of the recoverable value in annual periods.
Fixed assets are depreciated using the straight-line method, based on the following annual rates: buildings - 4%, facilities, furniture, equipment for use and security and communications systems - 10%, data processing systems and vehicles - 20% and improvements in third-party properties - 10% or until the lease agreement expires.
m) Intangible
Goodwill on the acquisition of subsidiaries and affiliates is amortized within 10 years, subject to the expectation of future results and is subject to the assessment of the recoverable amount in annual periods or more frequently if the conditions or circumstances indicate the possibility of loss of its value.
The rights for the acquisition of payrolls are accounted for by the amounts paid in the acquisition of rights to provide services for the payment of salaries, earnings, salaries, salaries, retirement, pensions and similar, from public or private entities, and amortized in accordance with the duration of the respective contracts.
Software acquisition and development expenses are amortized over a maximum period of 5 years.
n) Technical Provisions Related to Pension and Capitalization Activities
Technical reserves are set up and calculated in accordance with the determinations and criteria established in the regulations of the National Council for Private Insurance (CNSP) and the Superintendence of Private Insurance (SUSEP).
Technical Pension Provisions
Technical provisions are mainly constituted in accordance with the criteria below:
• Mathematical Provisions of Benefits to Be Granted and Granted (PMBaC and PMBC)
PMBaC is constituted from contributions collected through the capitalization financial system. The PMBC represents the obligations assumed in the form of continuing income plans, being constituted through actuarial calculations for the plans of the traditional types.
• Supplementary Coverage Provision (PCC)
The PCC must be created when insufficiency in the technical provisions resulting from the performance of the Liability Adequacy Test (TAP) is observed.
Technical provisions for capitalization
Technical provisions are set up in accordance with the criteria below:
• Mathematical provision for redemption results from the accumulation of applicable percentages on payments made, capitalized with the interest rate provided for in the plan and updated using the Basic Reference Rate (TR);
• Provision for redemption of prepaid securities is constituted from the cancellation due to non-payment or request for redemption of the security, based on the value of the mathematical provision for redemption constituted at the time of cancellation of the security and the provision for redemption of overdue securities is constituted after the end of the term of the title;
• Provision for unrealized drawings is constituted based on a percentage of the installment paid and is intended to cover the drawings in which the titles will compete, but which have not yet been carried out. The provision for raffles payable is set up for the titles drawn, but which have not yet been paid; and
• Provision for administrative expenses is intended to reflect the present value of future expenses on capitalization bonds whose validity extends after their constitution date.
o) Employee Benefit Plan
The post-employment benefit plans comprise the commitments assumed by the Bank to: (i) complement the benefits of the public pension system; and (ii) medical assistance, in the event of retirement, permanent disability or death for those eligible employees and their direct beneficiaries.
Defined Contribution Plan
Defined contribution plan is the post-employment benefit plan whereby the Bank and its subsidiaries, as sponsoring entities, pay fixed contributions to a pension fund during the period of employment of the beneficiary employee, without any legal or constructive obligation to pay additional contributions if the fund does not have sufficient assets to meet all benefits relating to services rendered in the current and prior periods.
Contributions made in this regard are recognized as personnel expenses in the income statement.
Defined Benefit Plans
Defined benefit plan is a post-employment benefit plan that is not a defined contribution plan and are presented in Note 29. For this type of plan, the obligation of the sponsoring entity is to provide the benefits agreed with the employees, assuming the potential actuarial risk that benefits will cost more than estimated.
Since January 2013, Banco Santander has applied the Technical Pronouncement of the Accounting Pronouncements Committee (CPC) 33 (R1), which establishes full recognition in a liability account when unrecognized actuarial losses (actuarial deficit) occur, in equity to the account from equity (other equity valuation adjustments).
Main Definitions
- The present value of a defined benefit obligation is the present value, without deducting any plan assets, from the expected future payments required to settle the obligation resulting from employee service in the current and past periods.
- Deficit or surplus is: (a) the present value of the defined benefit obligation; minus (b) the fair value of plan assets.
- The sponsoring entity may recognize plan assets in the balance sheet when they meet the following characteristics: (i) the fund's assets are sufficient to meet all employee benefit obligations of the plan or sponsoring entity; or (ii) the assets are returned to the sponsoring entity for the purpose of reimbursing it for benefits already paid to employees.
- Actuarial gains and losses are changes in the present value of the defined benefit obligation resulting from: (a) adjustments for experience (effects of differences between the adopted actuarial assumptions and what actually occurred); and (b) effects of changes in actuarial assumptions.
- Current service cost is the increase in the present value of the defined benefit obligation resulting from the service provided by the employee in the current period.
- Past service cost is the change in the present value of the defined benefit obligation for service provided by employees in prior periods, resulting from a change in the plan or a reduction in the number of covered employees.
Post-employment benefits are recognized in income under other operating expenses - actuarial losses - retirement plans (Note 27) and personnel expenses (Note 24).
Defined benefit plans are recorded based on an actuarial study, carried out annually by an external specialized consulting entity and approved by Management, at the end of each year and effective for the subsequent period.
p) Share-Based Compensation
The Bank has long-term compensation plans with conditions for acquisition. The main conditions for acquisition are: (1) conditions of service, as long as the participant remains employed during the term; (2) performance conditions, the number of shares to be delivered to each participant will be determined according to the result of the measurement of a performance parameter of the Bank: comparison of the Total Shareholder Return (RTA) of the Santander Conglomerate with the RTA of the main global competitors of the Group and (3) market conditions, as some parameters are conditioned to the market value of the Bank's shares. The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value.
Settlement in Shares
The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value. In order to recognize personnel expenses against capital reserves over the term, as services are received, the Bank considers the treatment of service conditions and recognizes the amount for services received during the period of term, based on the best assessment of the estimate for the number of equity instruments expected to be granted.
Cash Settlement
For cash-settled share-based payments (in the form of share appreciation), the Bank measures the services provided and the corresponding liability incurred at fair value. This procedure consists of capturing the appreciation of the shares between the grant and settlement date. The Bank reassesses the fair value of the liability at the end of each reporting period, any changes in this amount are recognized in profit or loss for the period. In order to recognize personnel expenses against the provisions in "salaries payable" throughout the term, reflecting how services are received, the Bank records the total liability that represents the best estimate of the amount of valuation right of the shares that will be acquired at the end of the effective period and recognizes the value of services received during the effective period, based on the best available estimate. Periodically, the Bank reviews its estimate of the number of share appreciation rights that will be acquired at the end of the vesting period.
Variable Compensation Referenced to Shares
In addition to the administrators, all employees in a position of risk takers receive at least 40% of their variable remuneration deferred in at least three years and 50% of the total variable remuneration in shares (SANB11), subject to the participant's permanence in the Group throughout the term of the plan.
The plan is subject to the application of Malus and Clawback clauses, according to which deferred portions of variable compensation can be reduced, canceled or returned in cases of non-compliance with internal rules and exposure to excessive risks.
The fair value of the shares is calculated based on the average of the final daily quotation of the shares in the 15 (fifteen) last trading sessions immediately prior to the first business day of the grant month.
q) Funding, Issues and Other Liabilities
Fundraising instruments are initially recognized at their fair value, basically considered as the transaction price. They are subsequently measured at amortized cost (expenses) with the inherent expenses recognized as a financial cost (Note 17).
Among the criteria for initial recognition of liabilities, mention should be made of those instruments of a compound nature, which are classified as such, given the existence of a debt instrument (liabilities) and an embedded equity component (derivatives).
The registration of a compound instrument consists of the combination of (i) a principal instrument, which is recognized as a genuine liability of the entity (debt) and (ii) an equity component (convertibility derivative into common shares).
Pursuant to COSIF, hybrid capital and debt instruments represent obligations of issuing financial institutions and must be recorded in specific liability accounts and updated according to agreed rates and adjusted for the effect of exchange variation, when denominated in currency foreign. All remuneration referring to these instruments, such as interest and exchange variation (difference between the functional currency and the currency in which the instrument was denominated) must be recorded as expenses for the period, on an accrual basis.
Regarding the equity component, it is recorded at the initial moment due to its fair value, if different from zero.
The details pertaining to the issuance of composite instruments are described in Note 17.
r) Provisions, Contingent Liabilities, Contingent Assets and Legal Obligations - Tax and Social Security
Banco Santander and its subsidiaries are parties to legal and administrative proceedings of a tax, labor and civil nature, arising from the normal course of their activities.
Provisions include legal obligations, legal and administrative proceedings related to tax and social security obligations, whose object of challenge is their legality or constitutionality, which, regardless of the assessment of the probability of loss, have their amounts fully recognized in the financial statements.
Provisions are reassessed at the end of each reporting period to reflect the current best estimate and may be fully or partially reversed, reduced or may also be supplemented, when there is a change in risk in relation to the outflows of resources and obligations relevant to the process, including the decay of legal deadlines, the unappealable decision of the processes, among others.
Judicial and administrative provisions are constituted when the risk of loss of the legal or administrative action is assessed as probable and the amounts involved are measurable with sufficient certainty, based on the nature, complexity, and history of the actions and on the opinion of internal legal advisors and external and best available information. For lawsuits whose risk of loss is possible, provisions are not set up and information is disclosed in the explanatory notes (Note 20.e) and for lawsuits whose risk of loss is remote, no disclosure is made.
Contingent assets are not recognized in the accounts, except when there are real guarantees or favorable court decisions, over which there are no further appeals, characterizing the gain as practically certain. Contingent assets with probable success, if any, are only disclosed in the financial statements.
In the case of final and unappealable decisions favorable to Banco Santander, the counterparty has the right, if specific legal requirements are met, to file a rescission action within a period determined by the legislation in force. Termination actions are considered new actions and will be assessed for contingent liability purposes if and when they are filed.
s) Social Integration Program (PIS) and Contribution to Social Security Financing (COFINS)
PIS (0.65%) and COFINS (4.00%) are calculated on the revenue of the activity or main object of the legal entity. Financial institutions are allowed to deduct funding expenses when determining the calculation basis. 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.
t) Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)
The IRPJ charge is calculated at the rate of 15%, plus the additional 10%, applied on the profit, after making the adjustments determined by the tax legislation. The CSLL is calculated at the rate of 15% for financial institutions and private insurance legal entities and those of capitalization and 9% for other companies, incident on profit, after considering the adjustments determined by the tax legislation. The CSLL rate for banks of any kind was raised from 15% to 20% effective march 1, 2020, pursuant to Article 32 of Constitutional Amendment 103, published on November 13, 2019.
Tax credits and deferred liabilities are basically calculated on the temporary differences between the accounting and tax results, on tax losses, negative basis of social contribution and adjustments to the 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 realization of the asset is estimated and/or the settlement of the liability.
According to the provisions of the current regulations, tax credits are recorded to the extent that their recovery is considered probable based on the generation of future taxable profits. The expectation of realization of tax credits, as demonstrated in Note 11, is based on projections of future results and based on a technical study.
The CSLL rate for banks of any kind, financial institutions, private insurance legal entities and capitalisation companies (legal entities in the financial sector) was increased by 1% for the base period from 1 August 2022 to 31 December 2022, pursuant to MP 1.115/2022.
u) Interest on Equity
Published on December 19, 2018, effective as of January 1, 2019, CMN Resolution No. 4,706 is prospectively applicable and determines procedures for the accounting record of capital remuneration. The Standard determines that Interest on Equity must be recognized from the moment they are declared or proposed and thus constitute an obligation present on the balance sheet date and, in compliance with this determination, this capital remuneration must be recorded in a specific account in Shareholders' Equity.
v) Reduction to the Recoverable Amount of Assets
Financial and non-financial assets are evaluated at the end of each period, in order to identify evidence of impairment of their book value. If there is any indication, the entity shall estimate the recoverable amount of the asset and such loss shall be recognized immediately in the income statement. The recoverable amount of an asset is defined as the greater of its fair value, net, of selling expenses and its value in use.
w) Results of Future Years
Refers to the income received before the fulfillment of the obligation period to which they originated, including non-refundable income, mainly related to guarantees and sureties provided and credit card annuities. The appropriation to the result is made in accordance with the term of the respective contracts.
x) Minority Shareholder Participation
The participation of non-controlling (minority) shareholders is recorded in a separate equity account of the controlling entity in the consolidated financial statements.
y) Financial Guarantees Provided
CMN Resolution No. 4,512 of July 28, 2016 and Bacen Circular Letter No. 3,782 of September 19, 2016 established accounting procedures to be applied, determining the constitution of a provision to cover losses associated with financial guarantees provided under any prospectively as of January 1, 2017. Losses associated with the probability of future disbursements linked to financial guarantees provided are evaluated in accordance with recognized credit risk management models and practices and based on consistent, reasonable information and criteria of verification. The provision must be sufficient to cover probable losses throughout the term of the guarantee provided and are periodically evaluated.
z) Recurring/Non-recurring Results
BCB Resolution No. 2, of November 27, 2020, in its article 34, started to determine the segregation of recurring and non-recurring results. Therefore, a non-current result of the exercise is defined as that which: I - is not related or is incidentally related to the institution's typical activities; and II - is not expected to occur frequently in future fiscal years.
The nature and financial effect of events considered non-recurring are shown in Note 32.h.
aa) Non-financial assets held for sale
As of January 1, 2021, CMN Resolutions no. 4,747 and 4,748 of August 2019 and BACEN Circular Letter No. 3,994, which establish criteria for recognition and measurement of non-financial assets held for sale by Financial Institutions.
CMN Resolution No. 4,747, among other requirements, establishes that depending on the origin of non-financial assets held for sale, financial institutions must classify them as:
a) own;
b) received in the settlement of a difficult or doubtful financial instrument as a form of payment of doubtful financial instruments not intended for its own use.
CMN Resolution No. 4,748, establishes that financial institutions and other institutions authorized to operate by the Central Bank of Brazil must comply with Technical Pronouncement CPC 46 - Fair Value Measurement (CPC46) in the measurement of equity and income elements, in situations in which the measurement at fair value of such elements is provided for in specific regulations.
ab) Current and Deferred Tax Assets and Liabilities
CMN Resolution No. 4,842, of July 30, 2020 consolidated the general criteria for measurement and recognition of current and deferred tax assets and liabilities by financial institutions and other institutions authorized to operate by the Central Bank of Brazil and BCB Resolution No. 15 , of September 17, 2020 (revoked BACEN Circulars No. 3.776/15 and No. 3.174/03), consolidated the procedures to be observed by institutions authorized to operate by the Central Bank of Brazil in the constitution or write-off of deferred tax assets and in the disclosure information on deferred tax assets or liabilities in the explanatory notes.
ac) Subsequent Events
Corresponds to the event that occurred between the base date of the financial statements and the date on which the issuance of these statements was authorized and comprises:
• Events that give rise to adjustments: are those that evidence conditions that already existed on the base date of the financial statements; and
• Events that do not give rise to adjustments: are those that show conditions that did not exist on the base date of the financial statements.
ad) Rate Conversion
CMN Resolution No. 4,924/2021, effective as of January 2022, consolidates and provides for general principles for accounting recognition, measurement, bookkeeping and disclosure of the content of the resolution, the main changes brought refer to the approval of CPC 47 and the possibility of using an alternative rate to the spot exchange rate for converting transactions and statements in foreign currency into the national currency. The Bank has evaluated the impacts of the adoption and is following the implementation schedule.
ae) Chart of Accounts (Cosif)
Resolution BCB No. 92/2021, effective from January 2022, provides for the structure of the list of Cosif accounts to be observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil. Among the proposed changes, the main highlight is the extinction of Group 5 – Income from Future Years, with all its amounts being consequently transferred to the Other Liabilities line.
Bank | ||||||||
6/30/2022 | 12/31/2021 | 6/30/2021 | 12/31/2020 | |||||
Cash | 10,091,602 | 16,361,758 | 28,091,844 | 19,522,250 | ||||
Interbank Investments | 40,461,590 | 17,935,878 | 12,718,050 | 9,668,922 | ||||
Money Market Investments | 29,618,110 | 15,055,356 | 5,163,132 | 7,348,568 | ||||
Interbank Deposits | 2,661,493 | 1,655,705 | 1,128,431 | 1,131,436 | ||||
Foreign Currency Investments | 8,181,987 | 1,224,817 | 6,426,487 | 1,188,917 | ||||
Total | 50,553,192 | 34,297,636 | 40,809,894 | 29,191,171 | ||||
Consolidated | ||||||||
6/30/2022 | 12/31/2021 | 6/30/2021 | 12/31/2020 | |||||
Cash | 10,119,817 | 16,386,974 | 28,111,171 | 19,512,315 | ||||
Interbank Investments | 39,340,797 | 17,263,365 | 12,269,690 | 9,487,000 | ||||
Money Market Investments | 29,618,110 | 15,055,356 | 5,163,132 | 7,306,408 | ||||
Interbank Deposits | 1,540,700 | 983,192 | 680,071 | 991,675 | ||||
Foreign Currency Investments | 8,181,987 | 1,224,817 | 6,426,487 | 1,188,917 | ||||
Total | 49,460,614 | 33,650,339 | 40,380,861 | 28,999,315 |
Bank | ||||||||||
6/30/2022 | 12/31/2021 | |||||||||
Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | ||||||
Money Market Investments | 47,420,240 | - | - | 47,420,240 | 25,883,579 | |||||
Own Portfolio | 5,795,021 | - | - | 5,795,021 | 7,066,196 | |||||
Financial Treasury Bills - LFT | 236,175 | - | - | 236,175 | 706,245 | |||||
National Treasury Bills - LTN | 3,068,662 | - | - | 3,068,662 | 1,556,526 | |||||
National Treasury Notes - NTN | 2,490,184 | - | - | 2,490,184 | 4,803,425 | |||||
Third-party Portfolio | 28,478,933 | - | - | 28,478,933 | 6,638,709 | |||||
Financial Treasury Bills - LTN | 560,550 | - | - | 560,550 | 500,173 | |||||
National Treasury Bills - NTN | 22,918,444 | - | - | 22,918,444 | 4,644,361 | |||||
National Treasury Notes - LFT | 4,999,939 | - | - | 4,999,939 | 1,494,175 | |||||
Sold Position | 13,146,286 | - | - | 13,146,286 | 12,178,674 | |||||
Financial Treasury Bills - LTN | 3,894,068 | - | - | 3,894,068 | 2,772,317 | |||||
National Treasury Bills - NTN | 9,252,218 | - | - | 9,252,218 | 8,792,071 | |||||
National Treasury Notes - LFT | - | - | - | - | 614,286 | |||||
Interbank Deposits | 13,274,388 | 47,333,028 | 29,074,140 | 89,681,556 | 91,952,361 | |||||
Foreign Currency Investments | 8,181,987 | - | - | 8,181,987 | 1,224,817 | |||||
Total | 68,876,615 | 47,333,028 | 29,074,140 | 145,283,783 | 119,060,757 | |||||
Consolidated | ||||||||||
6/30/2022 | 12/31/2021 | |||||||||
Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | ||||||
Money Market Investments | 47,444,317 | - | - | 47,444,317 | 25,912,368 | |||||
Own Portfolio | 5,819,098 | - | - | 5,819,098 | 7,094,986 | |||||
Financial Treasury Bills - LFT | 236,174 | - | - | 236,174 | 706,245 | |||||
National Treasury Bills - LTN | 3,092,740 | - | - | 3,092,740 | 1,585,316 | |||||
National Treasury Notes - NTN | 2,490,184 | - | - | 2,490,184 | 4,803,425 | |||||
Third-party Portfolio | 28,478,933 | - | - | 28,478,933 | 6,638,709 | |||||
Financial Treasury Bills - LTN | 560,550 | - | - | 560,550 | 500,173 | |||||
National Treasury Bills - NTN | 22,918,444 | - | - | 22,918,444 | 4,644,361 | |||||
National Treasury Notes - LFT | 4,999,939 | - | - | 4,999,939 | 1,494,175 | |||||
Sold Position | 13,146,286 | - | - | 13,146,286 | 12,178,673 | |||||
Financial Treasury Bills - LTN | 3,894,068 | - | - | 3,894,068 | 2,772,317 | |||||
National Treasury Bills - NTN | 9,252,218 | - | - | 9,252,218 | 8,792,071 | |||||
National Treasury Notes - LFT | - | - | - | - | 614,285 | |||||
Interbank Deposits | 2,055,271 | 3,304,406 | 2,121,437 | 7,481,114 | 6,492,133 | |||||
Foreign Currency Investments | 8,181,987 | - | - | 8,181,987 | 1,224,817 | |||||
Total | 57,681,575 | 3,304,406 | 2,121,437 | 63,107,418 | 33,629,318 |
6. Securities and Derivatives Financial Instruments
a) Securities
I) By Category
Bank | Consolidated | |||||||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||||||||||||||
Effect of Adjustment to Fair Value on: | Effect of Adjustment to Fair Value on: | |||||||||||||||||||
Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | |||||||||||
Trading Securities | 50,338,950 | (941,156) | - | 49,397,794 | 43,030,702 | 53,086,565 | (893,837) | - | 52,192,728 | 54,550,213 | ||||||||||
Government Securities | 47,737,473 | (761,971) | - | 46,975,502 | 41,914,956 | 50,419,843 | (714,651) | - | 49,705,192 | 51,360,528 | ||||||||||
Private Securities | 2,601,478 | (179,185) | - | 2,422,292 | 1,115,746 | 2,666,722 | (179,186) | - | 2,487,536 | 3,189,685 | ||||||||||
Available-for-Sale Securities | 127,362,076 | - | (2,049,668) | 125,312,409 | 149,877,343 | 147,063,214 | - | (2,892,846) | 144,170,367 | 157,876,639 | ||||||||||
Government Securities | 85,257,349 | - | (2,370,843) | 82,886,506 | 113,510,140 | 102,841,663 | - | (3,188,498) | 99,653,164 | 122,306,684 | ||||||||||
Private Securities | 42,104,727 | - | 321,176 | 42,425,903 | 36,367,203 | 44,221,551 | - | 295,652 | 44,517,203 | 35,569,955 | ||||||||||
Held-to-Maturity Securities | 22,972,672 | - | - | 22,972,672 | 15,279,130 | 22,972,672 | - | - | 22,972,672 | 15,279,130 | ||||||||||
Government Securities | 22,231,156 | - | - | 22,231,156 | 13,871,974 | 22,231,156 | - | - | 22,231,156 | 13,871,974 | ||||||||||
Private Securities | 741,516 | - | - | 741,516 | 1,407,156 | 741,516 | - | - | 741,516 | 1,407,156 | ||||||||||
Total Securities | 200,673,698 | (941,156) | (2,049,668) | 197,682,875 | 208,187,175 | 223,122,450 | (893,837) | (2,892,846) | 219,335,767 | 227,705,982 |
II) Trading Securities
Bank | ||||||||||||||||||||
06/30/2022 | 12/31/2021 | By Maturity | 06/30/2022 | |||||||||||||||||
Trading Securities | Amortized Cost | Adjustment to Fair Value - Income | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | ||||||||||
Government Securities | 47,737,473 | (761,971) | 46,975,502 | 41,914,956 | - | 6,587,965 | 7,057,109 | 7,218,238 | 26,112,190 | 46,975,502 | ||||||||||
Financial Treasury Bills - LFT | 1,235,883 | 1,858 | 1,237,741 | 3,341,790 | - | 183,806 | 267,245 | 414,348 | 372,342 | 1,237,741 | ||||||||||
National Treasury Bills - NTN | 37,583,031 | (683,223) | 36,899,809 | 12,531,398 | - | 4,639,233 | 6,336,558 | 3,985,225 | 21,938,793 | 36,899,809 | ||||||||||
National Treasury Notes - LTN | 8,711,365 | (79,249) | 8,632,116 | 24,340,120 | - | 1,676,568 | 351,033 | 2,806,522 | 3,797,992 | 8,632,116 | ||||||||||
Agricultural Debt Securities - TDA | 23,292 | (380) | 22,911 | 23,972 | - | 1,687 | 6,413 | 12,139 | 2,672 | 22,911 | ||||||||||
Brazilian Foreign Debt Notes | 392 | 2 | 394 | 1,673,785 | - | - | - | 3 | 391 | 394 | ||||||||||
North American Foreign Debt Notes | 183,510 | (980) | 182,531 | - | - | 86,671 | 95,860 | - | - | 182,531 | ||||||||||
Debentures | - | - | - | 3,891 | - | - | - | - | - | - | ||||||||||
Private Securities | 2,601,477 | (179,185) | 2,422,292 | 1,115,746 | 479,057 | 2,862 | 5,803 | 24,443 | 1,910,128 | 2,422,292 | ||||||||||
Shares | 14,994 | (3,125) | 11,869 | 13,692 | 11,869 | - | - | - | - | 11,869 | ||||||||||
Agribusiness Receivables Certificates - CRA | 338,616 | (2,591) | 336,026 | 11,502 | - | 2,862 | 5,626 | 7,034 | 320,504 | 336,026 | ||||||||||
Certificates of Real Estate Receivables - CRI | 196,480 | (127) | 196,353 | 57,603 | - | - | 139 | 212 | 196,002 | 196,353 | ||||||||||
Investment Fund Shares | 461,398 | 5,789 | 467,187 | 400,331 | 467,187 | - | - | - | - | 467,187 | ||||||||||
Debentures | 1,589,989 | (179,132) | 1,410,857 | 632,618 | - | - | 38 | 17,196 | 1,393,623 | 1,410,857 | ||||||||||
Total | 50,338,950 | (941,156) | 49,397,794 | 43,030,702 | 479,057 | 6,590,827 | 7,062,912 | 7,242,680 | 28,022,318 | 49,397,794 |
Consolidated | ||||||||||||||||||||
06/30/2022 | 12/31/2021 | By Maturity | 06/30/2022 | |||||||||||||||||
Trading Securities | Amortized Cost | Adjustment to Fair Value - Income | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | ||||||||||
Government Securities | 50,419,843 | (714,651) | 49,705,192 | 51,360,528 | - | 6,673,535 | 7,214,680 | 7,295,946 | 28,521,031 | 49,705,192 | ||||||||||
Financial Treasury Bills - LTN | 8,861,535 | (73,032) | 8,788,503 | 12,531,398 | - | 1,676,568 | 507,420 | 2,806,522 | 3,797,992 | 8,788,503 | ||||||||||
National Treasury Bills - LFT | 1,407,434 | 10,711 | 1,418,145 | 10,566,700 | - | 269,376 | 268,429 | 492,057 | 388,284 | 1,418,145 | ||||||||||
National Treasury Notes - NTN | 39,944,026 | (650,983) | 39,293,043 | 26,560,782 | - | 4,639,233 | 6,336,558 | 3,985,225 | 24,332,027 | 39,293,043 | ||||||||||
Agricultural Debt Securities - TDA | 22,945 | (369) | 22,576 | 23,972 | - | 1,687 | 6,413 | 12,139 | 2,337 | 22,576 | ||||||||||
Brazilian Foreign Debt Bonds | 392 | 2 | 394 | 1,673,785 | - | - | - | 3 | 391 | 394 | ||||||||||
North American Foreign Debt Notes | 183,511 | (980) | 182,531 | - | - | 86,671 | 95,860 | - | - | 182,531 | ||||||||||
Debentures | - | - | - | 3,891 | - | - | - | - | - | - | ||||||||||
Private Securities | 2,666,722 | (179,186) | 2,487,536 | 3,189,685 | 527,128 | 2,862 | 5,803 | 24,442 | 1,927,301 | 2,487,536 | ||||||||||
Shares | 15,022 | (3,125) | 11,897 | 1,502,576 | 11,897 | - | - | - | - | 11,897 | ||||||||||
Bank Deposit Certificates - CDB | 40,097 | - | 40,097 | - | 40,097 | - | - | - | - | 40,097 | ||||||||||
Agribusiness Receivables Certificates - CRA | 338,617 | (2,591) | 336,026 | 11,502 | - | 2,862 | 5,626 | 7,034 | 320,504 | 336,026 | ||||||||||
Certificates of Real Estate Receivables - CRI | 196,480 | (127) | 196,353 | 57,603 | - | - | 139 | 212 | 196,002 | 196,353 | ||||||||||
Investment Fund Shares | 486,517 | 5,789 | 492,306 | 438,074 | 475,134 | - | - | - | 17,172 | 492,306 | ||||||||||
Certificates of Agribusiness Receivables - CRA | 1,589,989 | (179,132) | 1,410,857 | 1,076,252 | - | - | 38 | 17,196 | 1,393,623 | 1,410,857 | ||||||||||
Debentures | - | - | - | 103,678 | - | - | - | - | - | - | ||||||||||
Total | 53,086,565 | (893,837) | 52,192,728 | 54,550,213 | 527,128 | 6,676,397 | 7,220,483 | 7,320,388 | 30,448,332 | 52,192,728 |
*For the purposes of Financial Statements, Securities Held for Trading are fully presented in the Balance Sheet in the short term.
III) Available-for-Sale Securities
Bank | ||||||||||||||||||||||
06/30/2022 | 12/31/2021 | By Maturity | 06/30/2022 | |||||||||||||||||||
Effect of Adjustment to Fair Value on: | ||||||||||||||||||||||
Available-for-Sale Securities | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | |||||||||||
Government Securities | 85,257,349 | - | (2,370,843) | 82,886,506 | 113,510,139 | - | 9,289,298 | 22,164,722 | 8,247,384 | 43,185,101 | 82,886,506 | |||||||||||
Treasury Certificates - CFT | - | - | - | - | 742 | - | - | - | - | - | - | |||||||||||
Securitized Credit | 12 | - | (12) | - | - | - | - | - | - | - | - | |||||||||||
Financial Treasury Bills - LFT | 40,311,894 | - | 132,000 | 40,443,894 | 38,317,693 | - | 295,966 | 7,717,764 | 3,059,840 | 29,370,324 | 40,443,894 | |||||||||||
National Treasury Bills - LTN (2) | - | - | - | - | 16,532,828 | - | - | - | - | - | - | |||||||||||
National Treasury Notes - NTN | 22,768,050 | - | (2,263,148) | 20,504,902 | 38,448,233 | - | 2,538,811 | - | 4,899,954 | 13,066,137 | 20,504,902 | |||||||||||
Brazilian Foreign Debt Bonds | 1,294,554 | - | (1,932) | 1,292,622 | 2,274,913 | - | 43,662 | 212,730 | 287,590 | 748,640 | 1,292,622 | |||||||||||
Spanish Foreign Debt Bonds | 19,117,330 | - | (243,686) | 18,873,644 | 15,606,719 | - | 5,564,617 | 13,309,027 | - | - | 18,873,644 | |||||||||||
Mexican Foreign Debt Bonds | 1,139,696 | - | 10,928 | 1,150,624 | 2,329,011 | - | 637,076 | 513,548 | - | - | 1,150,624 | |||||||||||
North American Foreign Debt Notes | 625,814 | - | (4,994) | 620,820 | - | - | 209,167 | 411,654 | - | - | 620,820 | |||||||||||
Private Securities | 42,104,727 | - | 321,176 | 42,425,903 | 36,367,203 | 1,690,849 | 3,582,274 | 9,896,322 | 13,206,995 | 14,049,463 | 42,425,903 | |||||||||||
Shares | 320 | - | (272) | 49 | 49 | 49 | - | - | - | - | 49 | |||||||||||
Rural Product Note - CPR | 15,170,156 | - | (465,421) | 14,704,734 | 9,597,656 | - | 1,386,888 | 7,027,831 | 3,725,384 | 2,564,631 | 14,704,734 | |||||||||||
Certificates of Agribusiness Receivables - CRA | 197,223 | - | 12,235 | 209,458 | 151,514 | - | - | - | 115,296 | 94,161 | 209,458 | |||||||||||
Certificates of Real Estate Receivables - CRI | 2,600 | - | (640) | 1,960 | 2,784 | - | - | - | - | 1,960 | 1,960 | |||||||||||
Investment Funds | 1,690,801 | - | - | 1,690,801 | 1,637,742 | 1,690,801 | - | - | - | - | 1,690,801 | |||||||||||
Investment Fund Real Estate | - | - | - | - | 169,064 | - | - | - | - | - | - | |||||||||||
Debentures (1) | 20,087,967 | - | 802,779 | 20,890,745 | 19,306,649 | - | 1,801,955 | 2,103,663 | 5,826,449 | 11,158,679 | 20,890,745 | |||||||||||
Eurobonds | 3,199,687 | - | 67,847 | 3,267,533 | 3,553,157 | - | - | - | 3,267,533 | - | 3,267,533 | |||||||||||
Financial Bills - LF | 172,882 | - | (306) | 172,576 | 273,905 | - | 172,576 | - | - | - | 172,576 | |||||||||||
COMMERCIAL NOTE |
| 40,204 |
| - |
| - |
| 40,204 |
| - |
| - |
| - |
| - |
| - |
| 40,204 |
| 40,204 |
Promissory Notes - NP | 1,542,888 | - | (95,046) | 1,447,842 | 1,674,683 | - | 220,855 | 764,827 | 272,333 | 189,828 | 1,447,842 | |||||||||||
Total | 127,362,076 | - | (2,049,668) | 125,312,409 | 149,877,342 | 1,690,849 | 12,871,571 | 32,061,044 | 21,454,380 | 57,234,564 | 125,312,409 |
*Mark-to-Market directed to Results for the securities in question is linked to the Market Risk Hedge strategy of fixed interest rate risk, see note 6.b) IV. Therefore, the effect on income is offset against future DI instruments used to hedge the fair value of this portfolio.
Consolidated | ||||||||||||||||||||||
06/30/2022 | 12/31/2021 | By Maturity | 06/30/2022 | |||||||||||||||||||
Effect of Adjustment to Fair Value on: | ||||||||||||||||||||||
Available-for-Sale Securities | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | |||||||||||
Government Securities | 102,841,663 | - | (3,188,498) | 99,653,165 | 122,306,684 | - | 15,144,753 | 24,222,411 | 12,838,160 | 47,447,841 | 99,653,165 | |||||||||||
Treasury Certificates - CFT | - | - | - | - | 742 | - | - | - | - | - | - | |||||||||||
Securitized Credit | 12 | - | (12) | - | - | - | - | - | - | - | - | |||||||||||
Financial Treasury Bills - LFT | 52,543,443 | - | 130,261 | 52,673,705 | 41,036,255 | - | 5,785,983 | 8,893,059 | 6,413,127 | 31,581,535 | 52,673,705 | |||||||||||
National Treasury Bills - LTN | 2,001,933 | - | (90,452) | 1,911,481 | 19,384,448 | - | 365,437 | 625,731 | 920,313 | - | 1,911,481 | |||||||||||
National Treasury Notes – NTN (2) | 26,118,881 | - | (2,988,612) | 23,130,269 | 41,674,596 | - | 2,538,811 | 256,663 | 5,217,129 | 15,117,665 | 23,130,269 | |||||||||||
Brazilian Foreign Debt Bonds | 1,294,554 | - | (1,932) | 1,292,622 | 2,274,913 | - | 43,662 | 212,730 | 287,590 | 748,640 | 1,292,622 | |||||||||||
Spanish Foreign Debt Bonds | 19,117,330 | - | (243,686) | 18,873,644 | 15,606,719 | - | 5,564,617 | 13,309,027 | - | - | 18,873,644 | |||||||||||
Mexican Foreign Debt Bonds | 1,139,696 | - | 10,928 | 1,150,624 | 2,329,011 | - | 637,076 | 513,548 | - | - | 1,150,624 | |||||||||||
North American Foreign Debt Notes | 625,814 | (4,994) | 620,820 | - | - | 209,167 | 411,654 | - | - | 620,820 | ||||||||||||
Private Securities | 44,221,551 | - | 295,652 | 44,517,203 | 35,569,955 | 3,347,171 | 3,582,274 | 9,896,321 | 13,206,995 | 14,484,442 | 44,517,203 | |||||||||||
Shares | 2,006,972 | - | (272) | 2,006,700 | 51 | 2,006,701 | - | - | - | - | 2,006,701 | |||||||||||
Investment Fund Shares | 1,344,267 | - | (3,797) | 1,340,470 | 1,306,605 | 1,340,470 | - | - | - | - | 1,340,470 | |||||||||||
Investment Fund Real Estate | - | - | - | - | 31,384 | - | - | - | - | - | - | |||||||||||
Debentures (1) | 20,643,208 | - | 781,052 | 21,424,260 | 18,976,693 | - | 1,801,955 | 2,103,662 | 5,826,449 | 11,692,193 | 21,424,259 | |||||||||||
Eurobonds | 3,199,687 | - | 67,847 | 3,267,533 | 3,553,157 | - | - | - | 3,267,533 | - | 3,267,533 | |||||||||||
Promissory Notes - NP | 1,444,353 | - | (95,046) | 1,349,307 | 1,674,683 | - | 220,855 | 764,827 | 272,333 | 91,292 | 1,349,307 | |||||||||||
Financial Bills - LF | 172,882 | - | (306) | 172,576 | 273,905 | - | 172,576 | - | - | - | 172,576 | |||||||||||
Certificates of Real Estate Receivables - CRI | 2,600 | - | (640) | 1,960 | 2,784 | - | - | - | - | 1,960 | 1,960 | |||||||||||
Certificates of Agribusiness Receivables - CRA | 197,223 | - | 12,235 | 209,458 | 151,514 | - | - | - | 115,296 | 94,161 | 209,458 | |||||||||||
Bank Deposit Certificates - CDB | - | - | - | - | 1,524 | - | - | - | - | - | - | |||||||||||
COMMERCIAL NOTE | 40,204 | - | - | 40,204 | - | - | - | - | - | 40,204 | 40,204 | |||||||||||
Rural Product Note - CPR | 15,170,156 | - | (465,421) | 14,704,734 | 9,597,655 | - | 1,386,888 | 7,027,831 | 3,725,384 | 2,564,631 | 14,704,734 | |||||||||||
Total | 147,063,213 | - | (2,892,846) | 144,170,368 | 157,876,639 | 3,347,171 | 18,727,026 | 34,118,732 | 26,045,155 | 61,932,283 | 144,170,367 |
(2) On June 30, 2022, the amount of 702,578 in the amount of R$ 692,063 (12/31/2021 - 913,500 in the amount of R$858,663) of National Treasury Notes - NTN, are linked to the obligation assumed by Banco Santander to cover the reserves to be amortized from the Pension Plans with the BANESPREV entity.
IV) Held-to-Maturity Securities
Bank/Consolidated | ||||||||||||||
By Maturity | 06/30/2022 | |||||||||||||
Amortized Cost | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | ||||||||||
Held-to-Maturity Securities (1) | 06/30/2022 | 12/31/2021 | Total | |||||||||||
Government Securities | 22,231,156 | 13,871,974 | - | 648,459 | 19,608,146 | 1,974,551 | 22,231,156 | |||||||
National Treasury Bills - LTN | 9,199,896 | - | - | - | 9,199,896 | - | 9,199,896 | |||||||
National Treasury Notes - NTN | 4,500,903 | 4,822,599 | - | - | 4,500,903 | - | 4,500,903 | |||||||
Brazilian Foreign Debt Bonds | 8,530,356 | 9,049,375 | - | 648,459 | 5,907,346 | 1,974,551 | 8,530,356 | |||||||
Private Securities | 741,516 | 1,407,156 | - | 741,516 | - | - | 741,516 | |||||||
Certificates of Agribusiness Receivables - CRA | 741,516 | 1,407,156 | - | 741,516 | - | - | 741,516 | |||||||
Total | 22,972,672 | 15,279,131 | - | 1,389,975 | 19,608,146 | 1,974,551 | 22,972,672 |
(1) The market value of securities held to maturity is R$ 23,154,688 (12/31/2021 - R$14,993,443).
For the semester ended June 30, 2022, there were no sales of federal government bonds and other securities classified in the held-to-maturity category.
In the second quarter of 2022, in accordance with the best corporate governance practices, Management approved the change in the classification of securities from available-for-sale to held-to-maturity. This decision is based on a response to external changes caused by the approval of Law 14,031/22 and with the objective of adapting the new conditions for better management of interest risk, since it is considered that the Bank has the economic and financial capacity to keep in balance the fixed-rate public securities LTNs, which until then were used to hedge the interest rate risk of financial instruments related to hedging the exchange rate variation of investment abroad.
Therefore, on June 30, 2022, Federal Public Securities - LTNs maturing in 2024 were reclassified from available for sale to held-to-maturity, in the amount of R$ 11 billion with no impact on income. The gross amount of mark-to-market recorded in Equity Valuation Adjustments accounts, within Shareholders' Equity, on the reclassification date is R$1,057 million and will be amortized against the income from financial intermediation accounts for the remaining term of the securities.
In compliance with the provisions of article 5 of Bacen Circular 3068/2001, Banco Santander has the financial capacity and the intention to hold securities classified in the held-to-maturity category until maturity.
The market value of securities is calculated considering the average price of organized markets and their estimated cash flow, discounted to present value in accordance with the corresponding applicable interest curves, considered as representative of market conditions at the time of calculation of the balance sheets.
V) Financial Income - Securities Transactions
Bank | Consolidated | |||
01/01 a | 01/01 a | 01/01 a | 01/01 a | |
Income From Fixed-Income Securities (1) | 3,150,937 | (1,121,165) | 3,586,711 | (590,948) |
Income From Interbank Investments | 6,107,600 | 3,683,697 | 2,432,755 | 1,772,209 |
Income From Variable-Income Securities | 18,707 | (31,841) | (156,247) | 12,671 |
Financial Income of Pension and Capitalization | - | - | 104,382 | 109,463 |
Provision for Impairment Losses (2) | (113,454) | 250,099 | (108,888) | 250,099 |
Others (3) | 326,876 | 234,118 | 431,859 | 226,903 |
Total | 9,490,666 | 3,014,908 | 6,290,572 | 1,780,397 |
(1) Includes exchange variation expense in the amount of R$ (6,039,922) in the Bank and Consolidated (2021 - revenue of R$ 2,831,356 in the Bank and Consolidated).
(2) Corresponds to the recording of permanent loss, referring to securities classified as available for sale.
(3) Includes revenue from exchange variation and net appreciation of investment and equity fund shares in the amount of R$ 338,230 in the Bank and Consolidated (2021 - exchange variation expense and net appreciation of investment and equity fund shares in the amount of R$ 226,902 in the Bank and Consolidated).
b) Derivatives Financial Instruments
The main risk factors of the derivative instruments assumed are related to exchange rates, interest rates and variable income. In the management of this and other market risk factors, practices are used that include the measurement and monitoring of the use of limits previously defined in internal committees, the value at risk of the portfolios, the sensitivities to interest rate fluctuations, the exposure exchange rate, liquidity gaps, among other practices that allow for the control and monitoring of risks, which may affect Banco Santander's positions in the various markets where it operates. Based on this management model, the Bank has managed, through the use of operations involving derivative instruments, to optimize the risk-benefit ratio even in situations of great volatility.
The fair value of derivative financial instruments is determined through market price quotations. The fair value of swaps is determined using discounted cash flow modeling techniques, reflecting appropriate risk factors. The fair value of forward and futures contracts is also determined based on quoted market prices for derivatives traded on exchanges or using methodologies similar to those described for swaps. The fair value of options is determined based on mathematical models such as Black & Scholes, implied volatilities and the fair value of the corresponding asset. Current market prices are used to price volatilities. For derivatives that do not have prices directly published by exchanges, the fair price is obtained through pricing models that use market information, inferred from published prices of more liquid assets. From these prices, yield curves and market volatilities that serve as input data for the models are extracted.
I) Summary of Derivative Financial Instruments
Swap operations are presented by the balances of the differentials’ receivable and payable.
Below is a breakdown of the Derivative Financial Instruments portfolio (Assets and Liabilities) by type of instrument, shown by their market value:
Bank | Consolidated | |||||||||||||||
6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||
Swap - Differential Receivable | 17,568,006 | 13,532,792 | 14,499,987 | 16,194,023 | 12,148,872 | 14,568,300 | 7,641,355 | 8,538,705 | ||||||||
Options to Exercise Awards | 1,486,925 | 1,971,946 | 1,548,530 | 2,202,234 | 1,486,925 | 1,971,946 | 1,370,541 | 2,256,244 | ||||||||
Term Contract and Other Contracts | 12,886,925 | 17,739,403 | 12,892,381 | 13,759,082 | 12,886,925 | 12,195,891 | 12,077,828 | 13,852,282 | ||||||||
Total | 31,941,856 | 33,244,141 | 28,940,898 | 32,155,339 | 26,522,722 | 28,736,137 | 21,089,724 | 24,647,231 |
II) Derivatives Recorded in Memorandum Accounts and Balance Sheets
Bank | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value | ||||||
Swap | 902,467,450 | (4,520,096) | 4,035,214 | 837,762,019 | (1,804,602) | (1,694,036) | ||||||
Assets | 448,980,469 | 13,063,833 | 17,568,006 | 418,137,448 | 13,189,437 | 14,499,987 | ||||||
CDI (Interbank Deposit Rates) | 99,990,825 | 3,422,566 | 5,428,373 | 66,837,268 | 318,541 | 1,826,150 | ||||||
Fixed Interest Rate - Real | 219,766,633 | 8,537,305 | 7,980,402 | 231,741,021 | 9,269,271 | 8,932,246 | ||||||
Indexed to Price and Interest Rates | 3,411,458 | 34,289 | 40,062 | 2,089,110 | 799,550 | 298,439 | ||||||
Foreign Currency | 125,811,553 | 1,069,673 | 4,119,169 | 91,837,446 | 2,775,313 | 3,205,330 | ||||||
Others | - | - | - | 25,632,603 | 26,763 | 237,822 | ||||||
Liabilities | 453,486,981 | (17,583,929) | (13,532,792) | 419,624,570 | (14,994,039) | (16,194,023) | ||||||
CDI (Interbank Deposit Rates) | 77,114,036 | (3,533,809) | (5,222,804) | 321,402,883 | (4,171,481) | (12,350,345) | ||||||
Fixed Interest Rate - Real | 237,952,520 | (11,095,055) | (2,424,915) | 48,874,762 | (6,760,576) | (2,408,062) | ||||||
Indexed to Price and Interest Rates | 10,708,223 | (192,397) | (378,927) | 22,827,336 | (28,407) | (1,142,945) | ||||||
Foreign Currency | 127,712,203 | (2,762,667) | (5,506,146) | 887,129 | (4,006,955) | (54,849) | ||||||
Others | - | - | - | 25,632,461 | (26,621) | (237,822) | ||||||
Options | 717,180,328 | (958,917) | (485,021) | 1,130,172,099 | (610,691) | (653,704) | ||||||
Purchased Position | 383,278,427 | 1,707,867 | 1,486,925 | 564,829,758 | 1,225,532 | 1,548,530 | ||||||
Call Option - Foreign Currency | 21,559,532 | 836,500 | 846,275 | 9,898,179 | 271,464 | 382,237 | ||||||
Put Option - Foreign Currency | 15,981,344 | 657,519 | 503,550 | 4,094,316 | 140,280 | 187,123 | ||||||
Call Option - Other | 77,831,496 | 77,611 | 93,994 | 31,248,540 | 444,648 | 673,616 | ||||||
Interbank Market | 75,419,297 | 1,090 | 69,160 | 28,499,055 | 444,446 | 673,202 | ||||||
Others (2) | 2,412,199 | 76,521 | 24,834 | 2,749,485 | 203 | 414 | ||||||
Put Option - Other | 267,906,056 | 136,237 | 43,106 | 519,588,723 | 369,140 | 305,553 | ||||||
Interbank Market | 267,453,073 | 102,523 | 1,641 | 519,588,723 | 369,140 | 305,553 | ||||||
Others (2) | 452,983 | 33,714 | 41,465 | - | - | - | ||||||
Sold Position | 333,901,900 | (2,666,785) | (1,971,946) | 565,342,341 | (1,836,224) | (2,202,234) | ||||||
Call Option - Foreign Currency | 20,044,786 | (644,947) | (619,801) | 4,111,016 | (170,553) | (152,348) | ||||||
Put Option - Foreign Currency | 17,299,115 | (541,913) | (464,756) | 4,017,161 | (348,715) | (287,825) | ||||||
Call Option - Other | 23,936,041 | (1,170,949) | (731,898) | 33,383,234 | (719,460) | (872,335) | ||||||
Interbank Market | 15,064,411 | (254,408) | (246,170) | 31,730,928 | (713,773) | (858,586) | ||||||
Others (2) | 8,871,630 | (916,541) | (485,728) | 1,652,305 | (5,687) | (13,749) | ||||||
Put Option - Other | 272,621,958 | (308,977) | (155,491) | 523,830,930 | (597,497) | (889,726) | ||||||
Interbank Market | 272,530,682 | (307,545) | (154,636) | 523,830,930 | (597,497) | (889,726) | ||||||
Others (2) | 91,276 | (1,432) | (855) | - | - | - | ||||||
Futures Contracts | 196,796,325 | - | - | 287,984,278 | - | - | ||||||
Purchased Position | 147,177,885 | - | - | 148,237,279 | - | - | ||||||
Exchange Coupon (DDI) | 74,656,849 | - | - | 85,931,389 | - | - | ||||||
Interest Rates (DI1 and DIA) | 53,515,987 | - | - | 28,491,764 | - | - | ||||||
Foreign Currency | 16,939,724 | - | - | 33,797,350 | - | - | ||||||
Indexes (3) | 1,789,219 | - | - | 16,776 | - | - | ||||||
Treasury Bonds/Notes | 276,107 | - | - | - | - | - | ||||||
Sold Position | 49,618,440 | - | - | 139,746,999 | - | - | ||||||
Exchange Coupon (DDI) | 15,705,129 | - | - | 60,606,204 | - | - | ||||||
Interest Rates (DI1 and DIA) | 18,992,828 | - | - | 53,267,620 | - | - | ||||||
Foreign Currency | 10,643,222 | - | - | 25,678,296 | - | - | ||||||
Indexes (3) | 2,916,301 | - | - | 194,879 | - | - | ||||||
Treasury Bonds/Notes | 1,360,960 | - | - | - | - | - | ||||||
Forward Contracts and Others | 126,688,148 | 3,986,101 | (4,852,478) | 174,435,332 | 2,836,843 | (866,701) | ||||||
Purchased Commitment | 86,359,303 | 6,044,618 | 12,886,925 | 96,509,221 | 5,345,415 | 12,892,381 | ||||||
Currencies | 5,807,415 | 579,232 | 10,884,169 | 83,752,185 | 2,738,485 | 10,306,159 | ||||||
Others | 80,551,888 | 5,465,386 | 2,002,756 | 12,757,036 | 2,606,930 | 2,586,222 | ||||||
Sell Commitment | 40,328,845 | (2,058,518) | (17,739,403) | 77,926,111 | (2,508,572) | (13,759,082) | ||||||
Currencies | 37,154,103 | (1,198,754) | (15,894,240) | 71,611,500 | (1,141,826) | (12,586,625) | ||||||
Others | 3,174,742 | (859,764) | (1,845,164) | 6,314,611 | (1,366,746) | (1,172,457) |
Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value | ||||||
Swap | 902,467,449 | (4,520,096) | (2,419,428) | 841,676,369 | (1,804,602) | (897,350) | ||||||
Assets | 448,980,468 | 13,063,833 | 12,148,872 | 422,001,798 | 13,189,437 | 7,641,355 | ||||||
CDI (Interbank Deposit Rates) | 99,990,825 | 3,422,566 | 5,428,373 | 66,837,268 | 318,541 | (778,177) | ||||||
Fixed Interest Rate - Real | 219,766,633 | 8,537,305 | 2,561,268 | 235,605,371 | 9,269,271 | 6,412,471 | ||||||
Indexed to Price and Interest Rates | 3,411,458 | 34,289 | 40,062 | 2,089,110 | 799,550 | (234,488) | ||||||
Foreign Currency | 125,811,553 | 1,069,673 | 4,119,169 | 91,837,446 | 2,775,313 | 2,003,728 | ||||||
Others | - | - | - | 25,632,603 | 26,763 | 237,822 | ||||||
Liabilities | 453,486,981 | (17,583,929) | (14,568,299) | 419,674,570 | (14,994,039) | (8,538,705) | ||||||
CDI (Interbank Deposit Rates) | 77,114,036 | (3,533,809) | (5,222,804) | 321,402,883 | (4,171,481) | (12,327,484) | ||||||
Fixed Interest Rate - Real | 237,952,520 | (11,095,055) | (3,460,423) | 48,874,762 | (6,760,576) | 2,467,425 | ||||||
Indexed to Price and Interest Rates | 10,708,223 | (192,397) | (378,927) | 22,827,336 | (28,407) | (728,677) | ||||||
Foreign Currency | 127,712,203 | (2,762,667) | (5,506,146) | 937,129 | (4,006,955) | 2,287,852 | ||||||
Others | - | - | - | 25,632,461 | (26,621) | (237,822) | ||||||
Options | 717,180,328 | (958,917) | (485,022) | 1,130,172,099 | (610,691) | (885,703) | ||||||
Purchased Position | 383,278,427 | 1,707,867 | 1,486,925 | 564,829,758 | 1,225,532 | 1,370,541 | ||||||
Call Option - Foreign Currency | 21,559,532 | 836,500 | 846,275 | 9,898,179 | 271,464 | 382,237 | ||||||
Put Option - Foreign Currency | 15,981,344 | 657,519 | 503,549 | 4,094,316 | 140,280 | 187,123 | ||||||
Call Option - Other | 77,831,496 | 77,611 | 93,994 | 31,248,540 | 444,648 | 495,628 | ||||||
Interbank Market | 75,419,297 | 1,090 | 69,160 | 28,499,055 | 444,446 | 495,214 | ||||||
Others (2) | 2,412,199 | 76,521 | 24,834 | 2,749,485 | 203 | 414 | ||||||
Put Option - Other | 267,906,056 | 136,237 | 43,106 | 519,588,723 | 369,140 | 305,553 | ||||||
Interbank Market | 267,453,073 | 102,523 | 1,641 | 519,588,723 | 369,140 | 305,553 | ||||||
Others (2) | 452,983 | 33,714 | 41,465 | - | - | - | ||||||
Sold Position | 333,901,900 | (2,666,785) | (1,971,946) | 565,342,341 | (1,836,224) | (2,256,244) | ||||||
Call Option - Foreign Currency | 20,044,786 | (644,947) | (619,801) | 4,111,016 | (170,553) | (152,348) | ||||||
Put Option - Foreign Currency | 17,299,115 | (541,913) | (464,756) | 4,017,161 | (348,715) | (287,825) | ||||||
Call Option - Other | 23,936,041 | (1,170,949) | (731,898) | 33,383,234 | (719,460) | (872,335) | ||||||
Interbank Market | 15,064,411 | (254,408) | (246,170) | 31,730,928 | (713,773) | (858,586) | ||||||
Others (2) | 8,871,630 | (916,541) | (485,728) | 1,652,305 | (5,687) | (13,749) | ||||||
Put Option - Other | 272,621,958 | (308,977) | (155,491) | 523,830,930 | (597,497) | (943,736) | ||||||
Interbank Market | 272,530,682 | (307,545) | (154,636) | 523,830,930 | (597,497) | (943,736) | ||||||
Others (2) | 91,276 | (1,432) | (855) | - | - | - | ||||||
Futures Contracts | 196,796,325 | - | - | 287,984,278 | - | - | ||||||
Purchased Position | 147,177,885 | - | - | 148,237,279 | - | - | ||||||
Exchange Coupon (DDI) | 74,656,849 | - | - | 85,931,389 | - | - | ||||||
Interest Rates (DI1 and DIA) | 53,515,987 | - | - | 28,491,764 | - | - | ||||||
Foreign Currency | 16,939,724 | - | - | 33,797,350 | - | - | ||||||
Indexes (3) | 1,789,219 | - | - | 16,776 | - | - | ||||||
Treasury Bonds/Notes | 276,107 | - | - | - | - | - | ||||||
Sold Position | 49,618,440 | - | - | 139,746,999 | - | - | ||||||
Exchange Coupon (DDI) | 15,705,129 | - | - | 60,606,204 | - | - | ||||||
Interest Rates (DI1 and DIA) | 18,992,828 | - | - | 53,267,620 | - | - | ||||||
Foreign Currency | 10,643,222 | - | - | 25,678,296 | - | - | ||||||
Indexes (3) | 2,916,301 | - | - | 194,879 | - | - | ||||||
Treasury Bonds/Notes | 1,360,960 | - | - | - | - | - | ||||||
Forward Contracts and Others | 126,688,148 | 3,986,101 | 691,034 | 174,435,332 | 2,836,843 | (1,774,454) | ||||||
Purchased Commitment | 86,359,303 | 6,044,618 | 12,886,925 | 96,509,221 | 5,345,415 | 12,077,828 | ||||||
Currencies | 5,807,415 | 579,232 | 10,884,169 | 83,752,185 | 2,738,485 | 9,491,606 | ||||||
Others | 80,551,888 | 5,465,386 | 2,002,756 | 12,757,036 | 2,606,930 | 2,586,222 | ||||||
Sell Commitment | 40,328,845 | (2,058,518) | (12,195,891) | 77,926,111 | (2,508,572) | (13,852,282) | ||||||
Currencies | 37,154,103 | (1,198,754) | (10,350,728) | 71,611,500 | (1,141,826) | (12,679,825) | ||||||
Others | 3,174,742 | (859,764) | (1,845,164) | 6,314,611 | (1,366,746) | (1,172,457) |
(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) Derivative Financial Instruments by Counterparty, Opening by Maturity and Trading Market
Bank | ||||||||||||||||||||
Notional | ||||||||||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 06/30/2022 | |||||||||||||||||
Related | Financial | Up to | From 3 to | Over | Over the Counter (3) | |||||||||||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | ||||||||||||
Swap | 316,768,028 | 90,803,860 | 41,408,580 | 448,980,468 | 418,137,448 | 35,795,964 | 105,056,504 | 308,128,000 | 64,468,629 | 384,511,839 | ||||||||||
Options | 75,085,449 | 1,770,126 | 640,324,752 | 717,180,328 | 1,130,172,099 | 227,786,130 | 437,825,169 | 51,569,029 | 274,883,856 | 442,296,472 | ||||||||||
Futures Contracts | 8,753,576 | - | 188,042,749 | 196,796,325 | 287,984,278 | 99,455,000 | 51,225,229 | 46,116,097 | 196,796,325 | - | ||||||||||
Forward Contracts and Others | 118,576,989 | 87,573 | 8,023,586 | 126,688,148 | 174,435,332 | 58,681,207 | 48,458,407 | 19,548,535 | 11,931,696 | 114,756,452 | ||||||||||
Consolidated | ||||||||||||||||||||
Notional | ||||||||||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 06/30/2022 | |||||||||||||||||
Related | Financial | Up to | From 3 to | Over | Over the Counter (3) | |||||||||||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | ||||||||||||
Swap | 316,768,028 | 90,803,860 | 41,408,580 | 448,980,468 | 422,001,798 | 35,795,964 | 105,056,504 | 308,128,000 | 64,468,629 | 384,511,839 | ||||||||||
Options | 75,085,449 | 1,770,126 | 640,324,752 | 717,180,328 | 1,130,172,099 | 227,786,130 | 437,825,169 | 51,569,029 | 274,883,856 | 442,296,472 | ||||||||||
Futures Contracts | 8,753,576 | - | 188,042,749 | 196,796,325 | 287,984,278 | 99,455,000 | 51,225,229 | 46,116,097 | 196,796,325 | - | ||||||||||
Forward Contracts and Others | 118,576,989 | 87,573 | 8,023,586 | 126,688,148 | 174,435,332 | 58,681,207 | 48,458,407 | 19,548,535 | 11,931,696 | 114,756,452 |
(1) Includes operations whose counterparty is B3 S.A. - Brazil, Bolsa, Balcão (B3) and other stock and commodity exchanges.
IV) 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:
IV.I) Market Risk Hedge
The Bank's market risk hedging strategies consist of protection structures against changes in market risk, receipts and payments of interest related to recognized assets and liabilities.
The market risk hedge management methodology adopted by the Bank segregates transactions by risk factor (e.g.: Real/Dollar exchange risk, risk of pre-fixed interest rate in reais, risk of dollar exchange coupon, risk of inflation, interest risk, etc.). Transactions generate exposures that are consolidated by risk factor and compared to pre-established internal limits.
In order to protect the market risk variation in the receipt and payment of interest, the Bank uses interest rate swaps and futures contracts related to fixed-rate assets and liabilities.
The Bank applies the market risk hedge as follows:
· Designates Foreign Currency swaps + Coupon versus % CDI and Pre-Real Interest Rate or US Dollar futures (DOL, DDI/DI) as a derivative instrument in Hedge Accounting structures, with foreign currency loan operations as the object.
· The Bank has a portfolio of assets indexed to the Euro and traded in Offshore branches. In the transaction, the value of the asset in Euros will be converted into Dollars at the rate of the exchange contract for the entry of the transaction. As from the conversion, the principal amount of the transaction, already expressed in US dollars, will be corrected by a floating or fixed rate. The assets will be hedged with Swap Cross Currency, in order to transfer the risk in Euro to LIBOR + Coupon.
· The Bank has pre-fixed interest rate risk generated by government bonds (NTN-F and LTN) in the portfolio of Financial Assets available for sale. To manage this mismatch, the entity contracts DI futures on the Exchange and designates them as a hedging instrument in a hedge accounting framework.
· The Bank has risk to the IPCA index generated by debentures in the portfolio of securities available for sale. To manage this mismatch, the Bank contracts IPCA futures (DAP) on the Exchange and designates them as a protection instrument in a hedge accounting structure.
· The Bank has a pre-fixed interest rate risk on its liabilities through issues of real estate letters of credit (LCI). To manage this mismatch, the entity contracts DI futures on the Exchange and designates them as a hedging instrument in a hedge accounting framework.
· The Bank has a risk related to the IPCA index generated by the issuance of a Guaranteed Real Estate Bill. To manage this mismatch, the Bank contracts IPCA futures (DAP) on the Exchange and designates them as a protection instrument in a hedge accounting structure.
· In the second quarter of 2022, a new hedge accounting structure was implemented with designation as of April 1, 2022, in which the hedge relationship is to protect up to 100% of the debts that make up the Time Deposit portfolio and corresponding Banks called in Dollars, through the contracting of derivative financial instruments to hedge against exchange rate risk.
In market risk hedge, 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.
IV.II) Cash Flow Hedge
The Bank's cash flow hedge strategies consist of hedging exposure to variations in cash flows, interest payments and exchange rate exposure, which are attributable to changes in interest rates relating to recognized assets and liabilities and changes exchange rates of unrecognized assets and liabilities.
The Bank applies cash flow hedge as follows:
• Contracts fixed dollar-indexed asset swaps and liabilities in foreign currency and designates them as a hedging instrument in a Cash Flow Hedge structure, having as object foreign currency loan transactions negotiated with third parties through offshore agencies and securities of the Brazilian external debt held to maturity.
• Contracts Dollar futures or DDI + DI Futures (Synthetic Dollar Futures) and designates them as a hedging instrument in a Cash Flow Hedge structure, having as object the Bank's credit portfolio in Dollars and Promissory Notes in portfolio of securities available for sale.
• Banco RCI Brasil SA has hedge operations whose purpose is funding operations with financial bills (LF), bills of exchange (LC) and Interbank Deposit Certificates (CDI) indexed to CDI and uses interest rate swaps to make the pre-fixed funding and predicting future cash flows.
In cash flow hedge, the effective portion of the variation in the value of the hedging instrument is temporarily recognized in equity under equity valuation adjustments until the forecast transactions occur, at which time this portion is recognized in the income statement. The ineffective portion of the variation in the value of foreign exchange hedge derivatives is recognized directly in the income statement. On June 30, 2022 and December 31, 2021, no results referring to the ineffective portion were recorded.
Bank | ||||||||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||||||||
Strategies | Accounting Value | Notional | Accounting Value | Notional | ||||||||||||||
Market Risk Hedge | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | ||||||||||
Swap Contracts | 58,185 | 83,888 | 453,937 | 439,405 | 84,937 | 82,563 | 559,396 | 551,710 | ||||||||||
Credit Operations Hedge | 58,185 | 83,888 | 453,937 | 439,405 | 84,937 | 82,563 | 559,396 | 551,710 | ||||||||||
Futures Contracts | 341,592 | 237,221 | 34,604,150 | 31,102,578 | 46,351,128 | 41,430,054 | 45,202,938 | 41,437,967 | ||||||||||
Credit Operations Hedge | 87,798 | 170,766 | 5,320,565 | 3,310,370 | 2,738,830 | 2,836,150 | 2,521,938 | 2,850,589 | ||||||||||
Securities Hedge | 20,961 | 24,873 | 18,147,962 | 18,125,530 | 43,612,299 | 38,593,904 | 42,680,999 | 38,587,378 | ||||||||||
Funding Hedge | 232,833 | 41,582 | 11,135,623 | 9,666,678 | - | - | - | - | ||||||||||
Cash Flow Hedge | ||||||||||||||||||
Futures Contracts | 9,948 | 13,303 | 35,711,172 | 34,326,836 | 119,760,298 | 110,316,582 | 128,673,067 | 110,932,644 | ||||||||||
Credit Operations Hedge | - | 11,505 | 2,751,875 | 2,586,217 | 30,167,942 | 27,965,018 | 28,659,545 | 28,542,862 | ||||||||||
Securities Hedge | 9,948 | 1,798 | 32,959,297 | 31,740,619 | 79,293,570 | 71,320,756 | 89,837,000 | 71,320,781 | ||||||||||
Funding Hedge | - | - | - | - | 10,298,786 | 11,030,809 | 10,176,522 | 11,069,000 |
Consolidated | ||||||||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||||||||
Strategies | Accounting Value | Notional | Accounting Value | Notional | ||||||||||||||
Market Risk Hedge | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | ||||||||||
Swap Contracts | 58,185 | 83,888 | 453,937 | 439,405 | 84,937 | 82,563 | 559,396 | 551,710 | ||||||||||
Credit Operations Hedge | 58,185 | 83,888 | 453,937 | 439,405 | 84,937 | 82,563 | 559,396 | 551,710 | ||||||||||
Futures Contracts | 341,592 | 237,221 | 34,604,150 | 31,102,578 | 46,351,128 | 41,430,054 | 45,202,938 | 41,437,967 | ||||||||||
Credit Operations Hedge | 87,798 | 170,766 | 5,320,565 | 3,310,370 | 2,738,830 | 2,836,150 | 2,521,938 | 2,850,589 | ||||||||||
Securities Hedge | 20,961 | 24,873 | 18,147,962 | 18,125,530 | 43,612,299 | 38,593,904 | 42,680,999 | 38,587,378 | ||||||||||
Funding Hedge | 232,833 | 41,582 | 11,135,623 | 9,666,678 | - | - | - | - | ||||||||||
Cash Flow Hedge | ||||||||||||||||||
Swap Contracts | 4,021,939 | 3,915,796 | 2,284,194 | 2,080,633 | 4,799,882 | 3,922,255 | 5,904,442 | 3,864,350 | ||||||||||
Funding Hedge | 4,021,939 | 3,915,796 | 2,284,194 | 2,080,633 | 4,799,882 | 3,922,255 | 5,904,442 | 3,864,350 | ||||||||||
Futures Contracts | 9,948 | 13,303 | 35,711,172 | 34,326,836 | 119,760,298 | 110,316,582 | 128,673,067 | 110,932,644 | ||||||||||
Credit Operations Hedge | - | 11,505 | 2,751,875 | 2,586,217 | 30,167,942 | 27,965,018 | 28,659,545 | 28,542,862 | ||||||||||
Securities Hedge | 9,948 | 1,798 | 32,959,297 | 31,740,619 | 79,293,570 | 71,320,756 | 89,837,000 | 71,320,781 | ||||||||||
Funding Hedge | - | - | - | - | 10,298,786 | 11,030,809 | 10,176,522 | 11,069,000 |
(*) The Bank has cash flow hedge strategies, whose objects are assets in its portfolio, which is why we demonstrate the liability position of the respective instruments. For structures whose instruments are futures, we show the notional balance, recorded in a memorandum account.
(1) Creditor amounts refer to asset transactions and debtor transactions to liability transactions.
Bank | Consolidated | |||||||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||||||||||||||
Up to | From 3 to | Over | Up to | From 3 to | Over | |||||||||||||||
Strategies | 3 Months | 12 Months | 12 Months | Total | Total | 3 Months | 12 Months | 12 Months | Total | Total | ||||||||||
Market Risk Hedge | ||||||||||||||||||||
Swap Contracts | - | - | 83,888 | 83,888 | 84,767 | - | - | 83,888 | 83,888 | 84,767 | ||||||||||
Credit Operations Hedge | - | - | 83,888 | 83,888 | 84,767 | - | - | 83,888 | 83,888 | 84,767 | ||||||||||
Futures Contracts | 35,014 | 135,349 | 66,859 | 237,221 | 41,437,967 | 35,014 | 135,349 | 66,859 | 237,221 | 41,437,967 | ||||||||||
Credit Operations Hedge | 35,014 | 135,752 | - | 170,766 | 38,587,378 | 35,014 | 135,752 | - | 170,766 | 38,587,378 | ||||||||||
Securities Hedge | - | (403) | 25,277 | 24,873 | 2,850,589 | - | (403) | 25,277 | 24,873 | 2,850,589 | ||||||||||
Funding Hedge | - | - | 41,582 | 41,582 | - | - | - | 41,582 | 41,582 | - | ||||||||||
Cash Flow Hedge | ||||||||||||||||||||
Swap Contracts | - | - | - | - | 3,728,462 | - | - | 3,915,796 | 3,915,796 | 3,728,462 | ||||||||||
Funding Hedge | - | - | - | - | 3,728,462 | - | - | 3,915,796 | 3,915,796 | 3,728,462 | ||||||||||
Futures Contracts | - | 13,303 | - | 13,303 | 110,932,644 | - | 13,303 | - | 11,505 | 110,932,644 | ||||||||||
Credit Operations Hedge | - | 11,505 | - | 11,505 | 28,542,862 | - | 11,505 | - | 11,505 | 28,542,862 | ||||||||||
Securities Hedge | - | 1,798 | - | 1,798 | 71,320,781 | - | 1,798 | - | 1,798 | 71,320,781 | ||||||||||
Funding Hedge | - | - | - | - | 11,069,000 | - | - | - | - | 11,069,000 |
In the Bank and Consolidated, the effect of mark-to-market of swap contracts and future assets corresponds to a credit in the amount of R$ 744,519 (12/31/2021 - R$193,793) and is recorded in equity, net of tax effects, of which R$ 0 (12/31/2021 – R$ 569) will be realized against revenue over the next twelve months.
V) Information on Credit Derivatives
Banco Santander uses credit derivatives for the purposes of managing counterparty risk and meeting the demands of its customers, carrying out operations of purchase and sale of protection through credit default swaps and total return swaps, primarily related to securities with Brazilian sovereign risk.
Total Return Swaps - TRS
They are credit derivatives where the return of the reference obligation is exchanged for a cash flow and in which, in the event of a credit event, the protection buyer usually has the right to receive from the protection seller the equivalent to the difference between the updated value and the fair value (market value) of the reference obligation on the contract settlement date.
Credit Default Swaps - CDS
They are credit derivatives where, in the event of a credit event, the protection buyer is entitled to receive from the protection seller the equivalent to the difference between the face value of the CDS contract and the fair value (market value) of the reference obligation on the settlement date of the contract. In return, the seller receives a fee for the sale of the protection.
Below, the composition of the Credit Derivatives portfolio shown by its reference value and effect on the calculation of Required Shareholders' Equity (PLE).
Bank/Consolidated | ||||||||
Valor Nominal | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Retained Risk - Total Rate of Return Swap | Transferred Risk - Credit Swap | Retained Risk - Total Rate of Return Swap | Transferred Risk - Credit Swap | |||||
Credit Swaps | 3,739,852 | - | 3,984,392 | - | ||||
Total | 3,739,852 | - | 3,984,392 | - |
06/30/2022 | 12/31/2021 | |||||||
Maximum Potential for Future Payments - Gross | Over 12 Months | Total | Over 12 Months | Total | ||||
Per Instrument: CDS | 3,739,852 | 3,739,852 | 3,984,392 | 3,984,392 | ||||
Per Risk Classification: Below Investment Grade | 3,739,852 | 3,739,852 | 3,984,392 | 3,984,392 | ||||
Per Reference Entity: Brazilian Government | 3,739,852 | 3,739,852 | 3,984,392 | 3,984,392 |
VI) 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 | |||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||
Financial Literature of the Treasury - LFT | 12,887,465 | 28,481,618 | 16,743,524 | 31,305,549 | ||||
National Treasury Bills - LTN | - | 1,015,470 | 2,067,868 | 3,751,223 | ||||
| 19,433,364 | 4,551,507 | 23,031,422 | 7,725,538 | ||||
Total | 32,320,828 | 34,048,594 | 41,842,814 | 42,782,310 |
The balance of the interbank relationship item is composed of restricted credits represented mainly by deposits made at Bacen to fulfill the requirements of compulsory on demand deposits, savings deposits and time deposits and by payments and receipts to be settled, represented by checks and other papers sent to the clearing service and payment transactions (active and passive position).
8. Credit Portfolio and Allowance for Expected Losses Associated with Credit Risk
a) Loan Portfolio
Bank | Consolidated | |||||||
6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||
Lending Operations | 325,044,180 | 317,359,419 | 391,619,071 | 383,479,674 | ||||
Loans and Discounted Titles | 212,843,183 | 209,544,801 | 215,699,642 | 211,026,403 | ||||
Financing | 41,869,001 | 39,635,785 | 105,587,433 | 104,274,438 | ||||
Rural and Agroindustrial - Financing | 14,140,964 | 13,409,499 | 14,140,964 | 13,409,499 | ||||
Real Estate Financing | 56,191,032 | 54,769,334 | 56,191,032 | 54,769,334 | ||||
Leasing Operations | - | - | 2,710,499 | 2,695,952 | ||||
Advances on Foreign Exchange Contracts (1) | 9,135,051 | 6,380,642 | 9,135,051 | 6,380,642 | ||||
Other Receivables (2) | 61,820,346 | 66,841,237 | 65,124,982 | 70,101,593 | ||||
Credits for Avals and Sureties Honored (Note 10.a.) | 338,772 | 169,942 | 559,361 | 471,385 | ||||
Income Receivable from Advances Granted - Foreign Exchange Portfolio | 131,160 | 131,244 | 131,160 | 131,244 | ||||
Other Receivables – Other | 61,350,414 | 66,540,051 | 64,434,461 | 69,498,964 | ||||
Total | 395,999,577 | 390,581,298 | 468,589,603 | 462,657,861 |
(1) Advances on foreign exchange contracts are classified as a reduction of other obligations (Note 9).
(2) Debtors for purchase of securities and assets and securities and credits receivable (Note 12).
Sale or Transfer of Financial Assets
Pursuant to CMN Resolution No. 3,533/2008 and subsequent amendments, credit assignment operations with substantial retention of risks and benefits, from January 1, 2012 on, began to remain recorded in the credit portfolio. For credit assignment operations carried out until December 31, 2011, regardless of the retention or substantial transfer of risks and benefits, the financial assets were derecognized from the registration of the original operation and the result determined in the assignment was appropriated to the result for the period.
(i) With Substantial Transfer of Risks and Benefits
In the Bank and Consolidated, during the period ended June 30, 2022, credit assignment operations without recourse were carried out in the amount of R$ 2,848,023 (12/31/2021 - R$13,255,965). These amounts refer to operations, substantially, of loans and discounted securities, not having amounts of this amount with a Group company.
(ii) With Substantial Retention of Risks and Benefits
In December 2011, the Bank assigned credits with recourse referring to real estate financing in the amount of R$688,821, whose maturities will occur until October 2041. On June 30, 2022, the present value of the assigned operations is R$ 36,219 ( 12/31/2021 – R$ 40,790).
These assignment operations were carried out with a co-obligation clause, with mandatory repurchase in the following situations:
- Non-performing contracts for a period exceeding 90 consecutive days;
- Contracts subject to renegotiation;
- Contracts subject to portability, pursuant to CMN Resolution No. 3401/2006; and
- Contracts subject to intervention.
The compulsory repurchase amount will be calculated by the debit balance of the credit duly updated on the respective repurchase date.
From the date of assignment, the cash flows from the assigned operations will be paid directly to the assignee.
b) Loan Portfolio by Maturity
Bank | Consolidated | |||||||
6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||
Overdue | 11,438,681 | 8,604,538 | 12,917,245 | 9,851,990 | ||||
Due to: | ||||||||
Up to 3 Months | 96,591,815 | 95,540,587 | 106,552,139 | 105,690,188 | ||||
From 3 to 12 Months | 92,354,297 | 94,386,260 | 116,684,173 | 118,277,838 | ||||
Over 12 Months | 195,614,784 | 192,049,913 | 232,436,046 | 228,837,845 | ||||
Total | 395,999,577 | 390,581,298 | 468,589,603 | 462,657,861 |
c) Loan Portfolio by Business Sector
Bank | Consolidated | |||||||
6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||
Private Sector | 395,045,647 | 389,584,358 | 467,634,937 | 461,660,021 | ||||
Industry | 64,728,057 | 66,175,356 | 65,964,710 | 67,326,360 | ||||
Commercial | 49,419,502 | 46,914,290 | 54,907,340 | 52,116,991 | ||||
Financial Institutions | 1,678,995 | 1,409,948 | 1,287,380 | 1,139,660 | ||||
Services and Other (1) | 62,586,912 | 64,288,268 | 69,466,472 | 70,874,163 | ||||
Individuals | 212,044,102 | 206,057,453 | 271,346,652 | 265,381,454 | ||||
Credit Cards | 45,505,455 | 45,804,859 | 45,505,455 | 45,804,859 | ||||
Mortgage Loans | 54,339,737 | 52,992,797 | 54,339,737 | 52,992,797 | ||||
Payroll Loans | 54,473,308 | 52,303,502 | 54,473,308 | 52,303,502 | ||||
Financing and Vehicles Lease | 1,285,095 | 1,703,858 | 56,179,225 | 56,514,921 | ||||
Others (2) | 56,440,507 | 53,252,437 | 60,848,927 | 57,765,375 | ||||
Agricultural | 4,588,079 | 4,739,043 | 4,662,383 | 4,821,393 | ||||
Public Sector | 953,930 | 996,940 | 954,666 | 997,840 | ||||
State | 361,044 | 331,735 | 361,044 | 331,735 | ||||
Municipal | 592,886 | 665,205 | 593,622 | 666,105 | ||||
Total | 395,999,577 | 390,581,298 | 468,589,603 | 462,657,861 |
(1) Includes real estate credit activities to construction companies/developers (business plan), transportation, health and personal services, among others.
(2) Includes personal loans, overdraft among others.
d) Loan Portfolio and Provision for Expected Losses Associated with Credit Risk Distributed by Corresponding Risk Levels
Bank | ||||||||||||||||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||||||||||||||||
% | Loan Portfolio | Allowance | Loan Portfolio | Allowance | ||||||||||||||||||||||
Risk Level | Minimum Allowance Required | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | |||||||||||||
AA | 0.0% | 177,131,101 | - | 177,131,101 | - | - | - | 180,139,073 | - | 180,139,073 | - | - | - | |||||||||||||
A | 0.5% | 104,779,727 | - | 104,779,727 | 523,899 | 3 | 523,902 | 104,992,054 | - | 104,992,054 | 524,960 | 2 | 524,962 | |||||||||||||
B | 1.0% | 35,036,329 | 2,388,523 | 37,424,852 | 374,249 | 206 | 374,455 | 35,871,587 | 2,253,434 | 38,125,021 | 381,250 | 167 | 381,417 | |||||||||||||
C | 3.0% | 28,884,407 | 3,193,832 | 32,078,239 | 962,347 | 1,925 | 964,272 | 29,029,189 | 2,798,938 | 31,828,127 | 954,844 | 1,899 | 956,743 | |||||||||||||
D | 10.0% | 12,905,965 | 3,958,258 | 16,864,223 | 1,686,422 | 84,212 | 1,770,634 | 10,439,757 | 3,063,622 | 13,503,379 | 1,350,338 | 2,206,475 | 3,556,813 | |||||||||||||
E | 30.0% | 3,218,604 | 2,864,414 | 6,083,018 | 1,824,905 | 1,046,272 | 2,871,177 | 2,346,953 | 2,301,009 | 4,647,962 | 1,394,389 | 757,194 | 2,151,583 | |||||||||||||
F | 50.0% | 2,365,016 | 2,228,360 | 4,593,376 | 2,296,688 | 773,339 | 3,070,027 | 1,828,300 | 1,831,787 | 3,660,087 | 1,830,043 | 582,385 | 2,412,428 | |||||||||||||
G | 70.0% | 2,367,959 | 2,011,920 | 4,379,879 | 3,065,916 | 919,319 | 3,985,235 | 1,865,631 | 1,570,929 | 3,436,560 | 2,405,590 | 643,556 | 3,049,146 | |||||||||||||
H | 100.0% | 5,487,904 | 7,125,263 | 12,613,167 | 12,613,167 | - | 12,613,167 | 3,375,689 | 6,964,787 | 10,340,476 | 10,340,475 | - | 10,340,475 | |||||||||||||
Total | 372,177,012 | 23,770,570 | 395,947,582 | 23,347,593 | 2,825,276 | 26,172,869 | 369,888,233 | 20,784,506 | 390,672,739 | 19,181,889 | 4,191,678 | 23,373,567 | ||||||||||||||
Consolidated | ||||||||||||||||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||||||||||||||||
Loan Portfolio | Allowance | Loan Portfolio | Allowance | |||||||||||||||||||||||
Risk Level | % Minimum Allowance Required | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | |||||||||||||
AA | 0.0% | 194,801,477 | - | 194,801,477 | - | - | - | 199,635,521 | - | 199,635,521 | - | - | - | |||||||||||||
A | 0.5% | 139,884,465 | 2,046 | 139,886,511 | 699,433 | 3 | 699,436 | 138,688,667 | 2,090 | 138,690,757 | 693,454 | 2 | 693,456 | |||||||||||||
B | 1.0% | 42,770,284 | 4,234,639 | 47,004,923 | 470,049 | 206 | 470,255 | 44,189,990 | 3,890,801 | 48,080,791 | 480,808 | 167 | 480,975 | |||||||||||||
C | 3.0% | 30,828,433 | 4,948,561 | 35,776,994 | 1,073,310 | 1,925 | 1,075,235 | 31,313,221 | 4,196,290 | 35,509,511 | 1,065,285 | 1,899 | 1,067,184 | |||||||||||||
D | 10.0% | 13,634,713 | 5,068,958 | 18,703,671 | 1,870,367 | 84,212 | 1,954,579 | 11,009,408 | 3,847,376 | 14,856,784 | 1,485,678 | 2,245,960 | 3,731,638 | |||||||||||||
E | 30.0% | 3,407,726 | 3,601,853 | 7,009,579 | 2,102,874 | 1,046,272 | 3,149,146 | 2,633,675 | 2,896,095 | 5,529,770 | 1,658,931 | 887,864 | 2,546,795 | |||||||||||||
F | 50.0% | 2,627,075 | 2,866,054 | 5,493,129 | 2,746,564 | 784,976 | 3,531,540 | 1,936,705 | 2,275,793 | 4,212,498 | 2,106,249 | 690,148 | 2,796,397 | |||||||||||||
G | 70.0% | 2,442,740 | 2,462,908 | 4,905,648 | 3,433,953 | 1,071,685 | 4,505,638 | 2,031,334 | 1,916,832 | 3,948,166 | 2,763,716 | 765,637 | 3,529,353 | |||||||||||||
H | 100.0% | 5,829,385 | 9,126,291 | 14,955,676 | 14,955,676 | - | 14,955,676 | 3,690,054 | 8,595,444 | 12,285,498 | 12,285,498 | - | 12,285,498 | |||||||||||||
Total | 436,226,298 | 32,311,310 | 468,537,608 | 27,352,226 | 2,989,279 | 30,341,505 | 435,128,575 | 27,620,721 | 462,749,296 | 22,539,619 | 4,591,677 | 27,131,296 |
(1) Includes due and overdue installments.
(2) The additional provision is constituted mainly based on the expected realization of the loan portfolio, in addition to the minimum required by current regulations.
(3) In the Bank and Consolidated, the total credit portfolio includes the amount of R$ 51,995 (12/31/2021- R$91,435), referring to the adjustment to market value of the credit operations that are subject to protection, recorded in accordance with article 5 of Circular Letter 3,624 of Bacen of December 26, 2013 and which are not included in the risk levels note.
Emergency Employment Support Program (PESE)
Pursuant to CMN Resolution No. 4,846/20, we demonstrate below the operations related to the Emergency Employment Support Program (PESE), classified by risk level and together with the amount of the provision made for each risk level:
Bank/Consolidated | |||||||
06/30/2022 | 12/31/2021 | ||||||
Risk Level | % Minimun | Assets | Allowance | Assets | Allowance | ||
AA | 0.0% | 7,445 | - | 9,132 | - | ||
A | 0.5% | 245,943 | 184 | 401,095 | 301 | ||
B | 1.0% | 169,865 | 255 | 276,818 | 415 | ||
C | 3.0% | 185,108 | 833 | 285,783 | 1,286 | ||
D | 10.0% | 138,603 | 2,079 | 165,099 | 2,476 | ||
E | 30.0% | 11,913 | 536 | 15,153 | 682 | ||
F | 50.0% | 8,832 | 662 | 19,682 | 1,476 | ||
G | 70.0% | 9,533 | 1,001 | 15,714 | 1,650 | ||
H | 100.0% | 231,351 | 13,182 | 120,077 | 18,011 | ||
Total | 1,008,593 | 18,733 | 1,308,553 | 26,297 | |||
|
e) Changes in Allowance for Loan Losses
Bank | Consolidated | |||||||
01/01 to 06/30/2022 | 01/01 to 06/30/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |||||
Opening Balance | 23,373,568 | 21,835,445 | 27,131,296 | 25,067,489 | ||||
Allowances Recognized | 9,049,271 | 5,936,734 | 10,920,500 | 7,064,177 | ||||
Write-offs | (6,249,970) | (5,174,358) | (7,710,291) | (6,129,653) | ||||
Closing Balance | 26,172,869 | 22,597,821 | 30,341,505 | 26,002,013 | ||||
Recoveries Credits | 1,154,703 | 1,322,337 | 1,464,128 | 1,498,852 |
f) Renegotiated Credits
Bank | Consolidated | |||||||
6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||
Renegotiated Credits | 27,157,821 | 20,005,822 | 31,684,401 | 23,634,268 | ||||
Allowance for Loan Losses | (13,374,036) | (10,100,946) | (14,775,465) | (11,120,588) | ||||
Percentage of Coverage on Renegotiated Credits | 49.2% | 50.5% | 46.6% | 47.1% |
g) Loan Portfolio Concentration
Consolidated | ||||||||
6/30/2022 | 12/31/2021 | |||||||
Loan Portfolio and Credit Guarantees (1), Securities (2) and Derivatives Financial Instruments (3) | Risk | % | Risk | % | ||||
Largest Debtor | 7,419,917 | 1.2% | 6,767,732 | 1.4% | ||||
10 Largest | 41,352,653 | 6.9% | 40,864,829 | 7.5% | ||||
20 Largest | 62,400,199 | 10.4% | 60,535,018 | 11.2% | ||||
50 Largest | 96,910,461 | 16.2% | 93,411,357 | 17.6% | ||||
100 Largest | 126,984,291 | 21.3% | 124,364,929 | 23.1% |
(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.
Exchange Portfolio
Bank/Consolidated | |||||||
06/30/2022 | 12/31/2021 | ||||||
Assets | |||||||
Rights to Foreign Exchange Sold | 20,239,093 | 25,885,822 | |||||
Exchange Purchased Pending Settlement | 38,126,058 | 38,311,762 | |||||
Advances in Local Currency | (673,185) | (138,651) | |||||
Income Receivable from Advances and Importing Financing | 131,160 | 131,244 | |||||
Currency and Documents Term Foreign Currency | - | 2,752 | |||||
Total | 57,823,126 | 64,192,929 | |||||
Liabilities | |||||||
Exchange Sold Pending Settlement | 27,517,052 | 34,822,053 | |||||
Foreign Exchange Purchased | 31,027,788 | 29,117,239 | |||||
Advances on Foreign Exchange Contracts (Note 8.a) | (9,135,051) | (6,380,642) | |||||
Others | 129 | 141 | |||||
Total | 49,409,918 | 57,558,791 |
Memorandum Accounts | |||
Outstanding Import Credits | 2,245,328 | 2,433,568 | |
Confirmed Export Credits | 48,883 | 288,822 |
a) Other Financial Assets
Bank | ||||
06/30/2022 | 12/31/2021 | |||
Total | Total | |||
Exchange Portfolio (Note 9) | 57,823,126 | 64,192,929 | ||
Trading and Intermediation of Values | 2,890,571 | 5,625,242 | ||
Interbank Accounts | 91,770,723 | 87,981,008 | ||
Credits for Avals and Sureties Honored (Note 8.a.) | 338,772 | 169,942 | ||
Total | 152,823,192 | 157,969,121 | ||
Consolidated | ||||
06/30/2022 | 12/31/2021 | |||
Exchange Portfolio (Note 9) | 57,823,126 | 64,192,929 | ||
Trading and Intermediation of Values | 4,228,153 | 6,723,764 | ||
Interbank Accounts | 92,107,619 | 88,376,555 | ||
Credits for Avals and Sureties Honored (Note 8.a.) | 559,361 | 471,385 | ||
Total | 154,718,259 | 159,764,633 |
b) Securities Trading and Brokerage
Bank | Consolidated | |||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Assets | ||||
Financial Assets and Pending Settlement Transactions | 792,837 | 1,521,217 | 1,821,883 | 1,897,317 |
Clearinghouse Transactions | 3,995 | 1,750 | 29,007 | 3,170 |
Debtors Pending Settlement | 16,427 | 39,216 | 265,835 | 718,223 |
Stock Exchanges - Guarantee Deposits | 880,827 | 3,095,211 | 885,796 | 3,099,913 |
Others (1) | 1,196,485 | 967,848 | 1,225,633 | 1,005,141 |
Total | 2,890,571 | 5,625,242 | 4,228,154 | 6,723,764 |
Liabilities | ||||
Financial Assets and Pending Settlement Transactions | 257,893 | 2,940,343 | 629,675 | 3,247,435 |
Creditors Pending Settlement | 7,135 | 6,717 | 305,858 | 150,476 |
Creditors for Loan of Shares | - | - | 541,047 | 448,390 |
Clearinghouse Transactions | 1 | - | 115,500 | 332,350 |
Records and Settlement | 3,596 | 2,766 | 4,506 | 3,685 |
Others | 426 | - | 17,653 | 327 |
Total | 269,051 | 2,949,826 | 1,614,239 | 4,182,663 |
(1) Refers to deposits made as collateral for derivative transactions carried out with clients in the over-the-counter market.
11. Tax Assets and Liabilities
a) Tax Credits
a.1) Nature and Origin of Recorded Deferred Tax Assets
Origins | Bank | |||||||||||
Balances on | Balances on | |||||||||||
06/30/2022 | 12/31/2021 | 12/31/2021 | Recognition | Realization | 06/30/2022 | |||||||
Allowance for Loan Losses | 35,554,381 | 32,151,456 | 14,468,155 | 4,076,931 | (2,545,614) | 15,999,471 | ||||||
Reserve for Legal and Administrative Proceedings - Civil | 3,729,789 | 4,323,509 | 1,945,580 | 287,782 | (554,956) | 1,678,406 | ||||||
Reserve for Tax Risks and Legal Obligations | 3,905,046 | 3,689,060 | 1,623,796 | 128,574 | (31,380) | 1,720,990 | ||||||
Reserve for Legal and Administrative Proceedings - Labor | 5,691,476 | 5,587,123 | 2,514,206 | 364,865 | (317,907) | 2,561,165 | ||||||
Agio | 106,485 | 109,248 | 49,162 | - | (1,243) | 47,919 | ||||||
Adjustment to Fair Value of Trading Securities and Derivatives | 9,575,601 | 8,081,267 | 1,562,878 | 2,442,458 | (2,100,130) | 1,905,206 | ||||||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 9,968,680 | 8,727,582 | 2,124,709 | 585,322 | (283,179) | 2,426,851 | ||||||
Accrual for Pension Plan (2) | 769,478 | 1,769,948 | 796,476 | 36,961 | (487,173) | 346,264 | ||||||
Profit Sharing, Bonuses and Personnel Gratuities | 947,904 | 1,226,774 | 529,182 | 412,515 | (534,942) | 406,755 | ||||||
Other Temporary Provisions (3) | 6,851,674 | 6,935,677 | 3,022,850 | - | (27,653) | 2,995,197 | ||||||
Total Tax Credits on Temporary Differences | 77,100,514 | 72,601,644 | 28,636,994 | 8,335,408 | (6,884,178) | 30,088,224 | ||||||
Tax Losses and Negative Social Contribution Bases | 10,080,975 | 10,144,740 | 4,536,556 | 262,005 | (327,993) | 4,470,568 | ||||||
Balance of Recorded Deferred Tax Assets | 87,181,489 | 82,746,384 | 33,173,550 | 8,597,413 | (7,212,171) | 34,558,792 | ||||||
Origins | Consolidated | |||||||||||
Balances on | Balances on | |||||||||||
06/30/2022 | 12/31/2021 | 12/31/2021 | Recognition | Realization | 06/30/2022 | |||||||
Allowance for Loan Losses | 42,147,130 | 38,547,733 | 17,036,391 | 4,898,647 | (3,262,215) | 18,672,823 | ||||||
Reserve for Legal and Administrative Proceedings - Civil | 4,001,074 | 4,590,834 | 2,046,045 | 336,328 | (598,155) | 1,784,218 | ||||||
Reserve for Tax Risks and Legal Obligations | 6,308,667 | 6,028,067 | 2,537,729 | 179,118 | (50,670) | 2,666,177 | ||||||
Reserve for Legal and Administrative Proceedings - Labor | 6,070,926 | 5,972,720 | 2,655,871 | 427,748 | (381,589) | 2,702,030 | ||||||
Agio | 106,485 | 109,248 | 49,162 | - | (1,243) | 47,919 | ||||||
Adjustment to Fair Value of Trading Securities and Derivatives | 9,724,721 | 8,196,778 | 1,609,048 | 2,455,902 | (2,100,130) | 1,964,820 | ||||||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 11,974,690 | 10,748,333 | 2,471,319 | 608,436 | (299,500) | 2,780,255 | ||||||
Accrual for Pension Plan (2) | 770,541 | 1,793,709 | 804,555 | 36,961 | (494,890) | 346,626 | ||||||
Profit Sharing, Bonuses and Personnel Gratuities | 1,084,227 | 1,432,705 | 599,768 | 464,234 | (611,445) | 452,557 | ||||||
Other Temporary Provisions (3) | 8,256,039 | 7,602,125 | 3,392,198 | 392,745 | (230,161) | 3,554,782 | ||||||
Total Tax Credits on Temporary Differences | 90,444,499 | 85,022,252 | 33,202,086 | 9,800,119 | (8,029,999) | 34,972,206 | ||||||
Tax Losses and Negative Social Contribution Bases | 10,412,816 | 10,295,706 | 4,755,984 | 325,052 | (360,961) | 4,720,075 | ||||||
Balance of Recorded Deferred Tax Assets | 100,857,315 | 95,317,958 | 37,958,070 | 10,125,171 | (8,390,960) | 39,692,280 |
(1) Includes deferred tax assets of IRPJ, CSLL, PIS and COFINS.
(2) Includes deferred tax assets of IRPJ and CSLL, on adjustments to the employee benefit plan.
(3) Mainly composed of provisions of an administrative nature.
On June 30, 2022, unactivated tax credits totaled R$ 67,553 (12/31/2021 – R$90,574) in the Consolidated.
The accounting record of Deferred Tax Assets in Santander Brasil's financial statements was made at the rates applicable to the expected period of their realization and is based on the projection of future results and on a technical study prepared pursuant to CMN Resolution No. 4,842/2020 and BCB Resolution No. 15.
a.2) Expected Realization of Recorded Tax Credits
Bank | |||||||||||
06/30/2022 | |||||||||||
Temporary Differences | Loss Carryforwards | Total | |||||||||
Year | IRPJ | CSLL | PIS/COFINS | Recorded | |||||||
2022 | 2,508,766 | 2,021,124 | 64,289 | 777,566 | 5,371,745 | ||||||
2023 | 5,493,014 | 4,371,756 | 128,579 | 2,628,002 | 12,621,351 | ||||||
2024 | 4,866,724 | 3,916,848 | 128,579 | 1,065,000 | 9,977,150 | ||||||
2025 | 2,715,873 | 2,184,426 | 128,579 | - | 5,028,878 | ||||||
2026 | 517,141 | 413,707 | 64,289 | - | 995,138 | ||||||
2027 to 2031 | 279,882 | 247,214 | - | - | 527,096 | ||||||
Over 2032 | 20,797 | 16,638 | - | - | 37,435 | ||||||
Total | 16,402,197 | 13,171,712 | 514,316 | 4,470,568 | 34,558,792 | ||||||
Consolidated | |||||||||||
06/30/2022 | |||||||||||
Temporary Differences | Loss Carryforwards | Total | |||||||||
Year | IRPJ | CSLL | PIS/COFINS | Recorded | |||||||
2022 | 2,981,134 | 2,296,867 | 67,758 | 794,418 | 6,140,176 | ||||||
2023 | 6,544,140 | 4,994,654 | 135,515 | 2,703,334 | 14,377,644 | ||||||
2024 | 5,590,532 | 4,367,281 | 135,515 | 1,104,481 | 11,197,809 | ||||||
2025 | 3,146,130 | 2,457,810 | 135,515 | 40,366 | 5,779,822 | ||||||
2026 | 841,880 | 613,759 | 67,758 | 19,908 | 1,543,305 | ||||||
2027 to 2031 | 290,885 | 267,620 | - | 57,198 | 615,702 | ||||||
Over 2032 | 20,811 | 16,643 | - | 369 | 37,822 | ||||||
Total | 19,415,512 | 15,014,633 | 542,060 | 4,720,075 | 39,692,280 |
Due to the existing differences between accounting, tax and corporate criteria, the expected realization of deferred tax assets should not be taken as an indication of the value of future results.
Based on CMN Resolution 4,818/2020 and BCB Resolution 2/2020, Deferred Tax Assets must be fully presented in the long term, for balance sheet purposes.
a.3) Present Value of Deferred Tax Assets
The present value of deferred tax assets recorded is R$ 30,572,178 - (12/31/2021 - R$31,575,967) in the Bank and R$35,069,802 - (12/31/2021 - R$36,110,693) in the Consolidated, calculated according to the expected realization of temporary differences, tax loss carryforwards, negative CSLL bases and the average funding rate, projected for the corresponding periods.
b) Other Liabilities - Tax and Social Security
Tax and Social Security | ||||
Bank | Consolidated | |||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Deferred Tax Liabilities | 2,619,134 | 2,030,169 | 3,580,063 | 2,708,477 |
Provision for Taxes and Contributions on Income | 631,662 | 174,588 | 1,574,320 | 1,339,495 |
Taxes Payable | 452,185 | 765,882 | 706,375 | 1,034,873 |
Total | 3,702,981 | 2,970,639 | 5,860,758 | 5,082,845 |
b.1) Nature and Origin of Deferred Tax Liabilities
Origins | Bank | |||||||||||
Balances on | Balances on | |||||||||||
06/30/2022 | 12/31/2021 | 12/31/2021 | Recognition | Realization | 06/30/2022 | |||||||
Adjustment to Fair Value of Trading Securities and Derivatives | 5,722,132 | 638,141 | 155,353 | 7,419,977 | (6,182,291) | 1,393,039 | ||||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 4,585,902 | 7,259,029 | 1,767,194 | 175,636 | (825,231) | 1,117,599 | ||||||
Excess Depreciation of Leased Assets | 21,369 | 21,438 | 5,360 | - | (17) | 5,343 | ||||||
Others | 229,641 | 227,660 | 102,262 | 891 | - | 103,153 | ||||||
Total | 10,559,044 | 8,146,268 | 2,030,169 | 7,596,504 | (7,007,539) | 2,619,134 | ||||||
Origins | Consolidated | |||||||||||
Balances on | Balances on | |||||||||||
06/30/2022 | 12/31/2021 | 12/31/2021 | Recognition | Realization | 06/30/2022 | |||||||
Adjustment to Fair Value of Trading Securities and Derivatives | 6,701,036 | 1,630,907 | 383,698 | 7,458,573 | (6,255,338) | 1,586,933 | ||||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 5,133,059 | 7,646,179 | 1,788,454 | 269,424 | (846,573) | 1,211,304 | ||||||
Excess Depreciation of Leased Assets | 1,380,346 | 1,343,391 | 335,784 | 28,974 | (19,751) | 345,007 | ||||||
Others | 977,872 | 476,538 | 200,541 | 244,837 | (8,559) | 436,818 | ||||||
Total | 14,192,314 | 11,097,015 | 2,708,477 | 8,001,807 | (7,130,222) | 3,580,063 |
(1) Includes IRPJ, CSLL, PIS and Cofins.
b.2) Expected Realization of Deferred Tax Liabilities
Bank | ||||||||
06/30/2022 | ||||||||
Temporary Differences | Total | |||||||
Year | IRPJ | CSLL | PIS/COFINS | Recorded | ||||
2022 | 161,081 | 128,143 | 30,654 | 319,878 | ||||
2023 | 322,162 | 256,286 | 61,308 | 639,756 | ||||
2024 | 322,162 | 256,286 | 61,308 | 639,756 | ||||
2025 | 321,271 | 256,286 | 61,308 | 638,865 | ||||
2026 | 163,061 | 130,430 | 30,654 | 324,145 | ||||
2027 to 2031 | 28,705 | 22,871 | - | 51,577 | ||||
After 2032 | 2,871 | 2,287 | - | 5,158 | ||||
Total | 1,321,312 | 1,052,590 | 245,232 | 2,619,134 | ||||
Consolidated | ||||||||
06/30/2022 | ||||||||
Temporary Differences | Total | |||||||
Year | IRPJ | CSLL | PIS/COFINS | Recorded | ||||
2022 | 362,604 | 164,278 | 35,174 | 562,056 | ||||
2023 | 558,070 | 309,815 | 70,349 | 938,234 | ||||
2024 | 423,675 | 308,231 | 70,349 | 802,255 | ||||
2025 | 414,704 | 304,382 | 68,870 | 787,956 | ||||
2026 | 227,152 | 163,029 | 33,696 | 423,877 | ||||
2027 to 2031 | 34,688 | 25,289 | - | 59,977 | ||||
After 2032 | 3,260 | 2,448 | - | 5,708 | ||||
Total | 2,024,153 | 1,277,472 | 278,438 | 3,580,063 |
c) Income Tax and Social Contribution
Bank | |||
01/01 to | 01/01 to | ||
Income Before Taxes on Income and Profit Sharing | 9,373,507 | 12,691,073 | |
Profit Sharing (1) | (947,998) | (858,132) | |
Income Before Taxes | 8,425,509 | 11,832,941 | |
Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (3) | (3,791,479) | (5,324,823) | |
Equity in Subsidiaries (2) | 1,104,374 | 881,699 | |
Nondeductible Expenses, Net of Non-Taxable Income | 624,288 | (471,973) | |
Interest on Equity | 1,127,349 | - | |
Exchange Variation - Foreign Branches | - | (331,097) | |
Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises | 293,538 | 279,051 | |
Other Adjustments Social Contribution Taxes 5% (3) | - | 218,034 | |
Other Adjustments, Including Profits Provided Abroad | (7,194) | 11,246 | |
Income and Social Contribution Taxes | (649,124) | (4,737,863) | |
Current Taxes | (762,677) | (4,815,896) | |
Income tax and social contribution for the year | (762,677) | (4,815,896) | |
Deferred Taxes | 179,542 | 2,073,467 | |
Constitution / realization in the period on temporary additions and exclusions - Result | 179,542 | 2,073,467 | |
Use of opening balances of: | (327,992) | (1,995,434) | |
Negative social contribution base | (139,657) | (869,479) | |
Tax loss | (188,335) | (1,125,955) | |
Constitution in the period on: | 262,003 | - | |
Negative social contribution base | 126,904 | - | |
Tax loss | 135,099 | - | |
Total deferred taxes | 113,553 | 78,033 | |
Income tax and social contribution | (649,124) | (4,737,863) |
Consolidated | |||
01/01 to | 01/01 to | ||
Income Before Taxes on Income and Profit Sharing | 11,248,685 | 13,854,344 | |
Profit Sharing (1) | (938,809) | (940,467) | |
Unrealized Income | (176) | 358 | |
Income Before Taxes | 10,309,700 | 12,914,235 | |
Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (3) | (4,639,365) | (5,811,406) | |
Equity in Subsidiaries (2) | 19,530 | 12,855 | |
Nondeductible Expenses, Net of Non-Taxable Income (4) | 901,496 | (464,739) | |
Exchange Variation - Foreign Branches | - | (331,097) | |
Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises | 23,678 | 304,714 | |
Interest on Capital | 1,127,349 | 5,490 | |
Effects of Change in Rate of CSLL (3) | 284,384 | 182,495 | |
Other Adjustments Social Contribution Taxes 5% | - | 269,672 | |
Other Adjustments, Including Profits Provided Abroad | (5,543) | (94,862) | |
Income and Social Contribution Taxes | (2,288,471) | (5,926,879) | |
Current Taxes | (2,338,169) | (6,125,830) | |
Income tax and social contribution for the year | (2,338,169) | (6,125,830) | |
Deferred Taxes | 131,260 | 2,221,272 | |
Constitution / realization in the period on temporary additions and exclusions - Result | 131,260 | 2,221,272 | |
Use of opening balances of: | (342,582) | (2,026,985) | |
Negative social contribution base | (154,247) | (869,479) | |
Tax loss | (188,335) | (1,157,506) | |
Constitution in the period on: | 261,020 | 4,664 | |
Negative social contribution base | 125,920 | 1,163 | |
Tax loss | 135,100 | 3,501 | |
Total deferred taxes | 49,698 | 198,951 | |
Income tax and social contribution | (2,288,471) | 5,926,879 |
(1) The calculation basis is net income, after IR and CSLL.
(2) Interest on shareholders' equity received and receivable is not included in the results of investments in associates and subsidiaries.
(3) Effect of the rate difference for companies that use the social contribution rate of 9% and 15%.
(4) In addition to the recurring events shown in this line, the relative amounts of the judgment of Theme 962 by the Federal Supreme Court (STF) were also recognized for the non-levy of IRPJ and CSLL on the amounts related to the Selic rate of repetition of tax undue.
Exchange Hedge of Grand Cayman Agency, Luxembourg Agency
Banco Santander operates branches in the Cayman Islands and Luxembourg, which are mainly used to raise funds in the international capital and financial markets, to provide the Bank with lines of credit that are extended to its customers for foreign trade financing and working capital.
To cover the exposure to exchange variations, the Bank uses derivatives and funding. Under Brazilian tax rules, gains or losses arising from the impact of the appreciation or devaluation of the Real on foreign investments were not taxable, but as of January 2021 they became taxable or deductible for IR/CSLL purposes, while that gains or losses from derivatives used as a hedge are taxable or deductible. The purpose of these derivatives is to protect net income after taxes.
Law 14,031, of July 28, 2020, determined that as of January 2021, 50% of the exchange rate variation on investments abroad must be computed in the determination of taxable income and the basis for calculating the Social Contribution on Net Income ( CSLL) of the investing company domiciled in the country. As of 2022, the exchange variation will be fully computed in the taxable bases of IRPJ and CSLL.
The different tax treatment of such exchange differences results in volatility in the "Income from operations before taxation" and in the item "Income taxes". Below are the effects of the transactions carried out, as well as the total effect of the currency hedge for the semesters ended June 30, 2022 and 2021:
In Reais Millions | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | ||
Financial Operations | ||||
Result generated by the exchange rate variations on the Bank's investment in the Cayman and EFC Agency | (2,500) | (1,944) | ||
Result generated by derivative contracts used as hedge | 2,622 | 2,869 | ||
Tax Expenses | ||||
Tax effect of derivative contracts used as hedge - PIS/COFINS | (122) | (133) | ||
Income Tax and Social Contribution | ||||
Tax effect of derivative contracts used as hedge - IR/CS | - | (792) |
d) Tax Expenses
Bank | Consolidated | |||
01/01 to | 01/01 to | 01/01 to | 01/01 to | |
Cofins (Contribution for Social Security Financing) | 1,194,983 | 1,288,709 | 1,613,358 | 1,653,170 |
ISS (Tax on Services) | 309,164 | 309,556 | 407,130 | 399,602 |
PIS (Tax on Revenue) | 194,185 | 209,415 | 276,058 | 279,503 |
Others | 173,622 | 84,034 | 249,998 | 104,353 |
Total | 1,871,954 | 1,891,715 | 2,546,544 | 2,436,627 |
Bank | Consolidated | ||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | ||||
Notes and Credits Receivable | |||||||
Credit Cards | 36,652,885 | 38,697,565 | 36,652,885 | 38,697,565 | |||
Receivables (1) | 24,038,205 | 27,228,813 | 29,178,885 | 31,770,716 | |||
Escrow Deposits for: | |||||||
Tax Claims | 5,686,072 | 5,481,136 | 7,499,582 | 7,258,166 | |||
Labor Claims | 1,564,770 | 1,648,343 | 1,682,165 | 1,752,187 | |||
Others - Civil | 1,162,238 | 1,096,701 | 1,331,418 | 1,286,274 | |||
Contract Guarantees - Former Controlling Stockholders (Note 20.f) | 496 | 496 | 496 | 496 | |||
Reimbursable Payments | 166,277 | 178,077 | 181,672 | 192,562 | |||
Salary Advances/Others | 211,995 | 199,212 | 1,465,907 | 856,579 | |||
Employee Benefit Plan (Note 29.a) | 227,965 | 231,100 | 278,966 | 287,809 | |||
Debtors for Purchase of Assets | 578,447 | 551,756 | 650,211 | 602,780 | |||
Receivable from Affiliates | 33,890 | 38,827 | 174,188 | 242,217 | |||
Income Receivable | 2,904,761 | 3,077,494 | 3,054,282 | 3,110,771 | |||
Other Values and Assets | 2,125,770 | 1,361,411 | 2,350,802 | 1,552,099 | |||
Others | 4,159,691 | 2,081,481 | 4,968,879 | 2,755,980 | |||
Total | 79,513,462 | 81,872,412 | 89,470,338 | 90,366,201 |
(1) Consists of operations with credit assignment characteristics, substantially consisting of "Confirming" operations with legal entities subject to credit risk and analysis of expected losses associated with credit risk by segment, in accordance with the Bank's risk policies.
13. Dependences Information and Foreign Subsidiary
Branches:
Grand Cayman Branch (Cayman Branch)
The Grand Cayman Branch is licensed under the Banking and Trust Company Act and is duly registered as a Foreign Company with the Grand Cayman, Cayman Islands Corporate Registry Officer. The agency, therefore, is duly authorized to carry out banking business in the Cayman Islands, and is currently involved in fundraising business in the international banking and capital market to provide lines of credit to Banco Santander, which are then extended to the Bank's customers. Santander for working capital and foreign trade financing. It also takes deposits in foreign currency from corporate and individual clients and grants credit to Brazilian and foreign clients, primarily to support commercial operations with Brazil.
Luxembourg
On June 9, 2017, Banco Santander obtained authorization from Bacen to set up a branch in Luxembourg, with outstanding 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 the expansion of the funding capacity. The opening of the branch was authorized by the Minister of Finance of Luxembourg on March 5, 2018. On April 3, 2018, after the Cayman Branch's capital was reduced by an equivalent amount, the amount of US$1 billion was allocated to the capital. seconded company from the Luxembourg agency.
Subsidiary:
The summarized financial positions of the branches and subsidiary abroad, converted at the exchange rate in effect on the balance sheet date included in the financial statements, comprise the following positions (without eliminating transactions with affiliates):
Grand Cayman Branch (3) | Luxembourg Branch (3) | |||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||
Assets | 153,896,834 | 158,796,211 | 88,237,400 | 81,914,595 | ||||
Current and Long-term Assets | 153,896,804 | 158,796,179 | 88,237,281 | 81,914,414 | ||||
Cash | 1,337,153 | 9,127,129 | 2,617,003 | 1,630,327 | ||||
Interbank Investments | 46,241,442 | 26,583,540 | 10,196,293 | 13,138,145 | ||||
Securities and Derivatives Financial Instruments | 78,269,192 | 89,178,436 | 18,252,181 | 14,433,434 | ||||
Lending Operations (1) | 13,466,035 | 18,271,074 | 52,232,215 | 46,639,821 | ||||
Foreign Exchange Portfolio | 9,739,271 | 11,128,060 | 4,488,207 | 5,473,283 | ||||
Others | 4,843,711 | 4,507,940 | 451,382 | 599,404 | ||||
Permanent Assets | 30 | 32 | 119 | 181 | ||||
Liabilities | 153,896,834 | 158,796,211 | 88,237,400 | 81,914,595 | ||||
Current and Long-term Liabilities | 122,018,628 | 120,638,194 | 80,718,232 | 74,024,804 | ||||
Deposits and Money Market Funding | 40,503,851 | 30,505,351 | 11,994,295 | 7,973,185 | ||||
Funds from Acceptance and Issuance of Securities | 20,220,257 | 20,395,593 | 35,341,639 | 36,365,115 | ||||
Debt Instruments Eligible to Compose Capital | 13,221,494 | 14,088,607 | - | - | ||||
Borrowings (2) | 26,242,367 | 31,320,740 | 25,679,503 | 23,239,576 | ||||
Foreign Exchange Portfolio | 9,582,281 | 11,050,587 | 4,673,139 | 5,480,439 | ||||
Others | 12,248,378 | 13,277,316 | 3,029,656 | 966,489 | ||||
Future Year Results | - | 30,309 | - | 11,693 | ||||
Stockholders' Equity | 31,878,206 | 38,127,708 | 7,519,168 | 7,878,098 | ||||
01/01 to | 01/01 to | 01/01 to | 01/01 to | |||||
Period result | 1,035,991 | 1,210,345 | 334,600 | 369,291 |
|
(1) Refers, mainly, to financial operations, in terms of export financing.
(2) Obligations for loans abroad related to export and import financing lines and other credit lines.
(3) The functional currency is Real.
14. Investments in Affiliates and Subsidiaries Subsidiary
a) Consolidation Perimeter
Quantity of Shares or Quotas Owned (in Thousands) | 06/30/2022 | ||||
Investments | Activity | Common Shares and Quotas | Preferred Shares | Direct Participation | Consolidated Participation |
Controlled by Banco Santander | |||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | Credit Collection and Recovery Management | 2,607,128 | - | 100.00% | 100.00% |
Aymoré Crédito, Financiamento e Investimento S.A. (Aymoré CFI) | Financial | 26,655 | - | 100.00% | 100.00% |
Banco RCI Brasil S.A. | Bank | 81 | 81 | 39.89% | 39.89% |
Ben Benefícios e Serviços Instituição de Pagamentos S.A.(BEN Benefícios) | Payment Method | 90,000 | - | 100.00% | 100.00% |
Esfera Fidelidade S.A. | Services provision | 10,001 | - | 100.00% | 100.00% |
GIRA - Gestão Integrada de Recebíveis do Agronegócio S.A. | Tecnology | 381 | - | 80.00% | 80.00% |
Rojo Entretenimento S.A. | Broker | 7,417 | - | 94.60% | 94.60% |
Sanb Promotora de Vendas e Cobrança Ltda. | Provision of Digital Media Services | 30,988 | - | 100.00% | 100.00% |
Sancap Investimentos e Participações S.A. (Sancap) | Holding | 23,538,159 | - | 100.00% | 100.00% |
Santander Brasil Administradora de Consórcio Ltda. (Santander Brasil Consórcio) | Buying Club | 436,441 | - | 100.00% | 100.00% |
Santander Corretora de Câmbio e Valores Mobiliários S.A. (Santander CCVM) | Broker | 14,067,640 | 14,067,640 | 99.99% | 99.99% |
Santander Corretora de Seguros, Investimentos e Serviços S.A. (Santander Corretora de Seguros) | Other Activities | 7,184 | - | 100.00% | 100.00% |
Santander Holding Imobiliária S.A. | Holding | 558,601 | - | 100.00% | 100.00% |
Santander Leasing S.A. Arrendamento Mercantil (Santander Leasing) | Leasing | 164 | - | 100.00% | 100.00% |
F1RST Tecnologia e Inovação Ltda. | Provision of Technology Services | 188,575 | - | 100.00% | 100.00% |
SX Negócios Ltda. | Provision of Call Center Services | 75,050 | - | 100.00% | 100.00% |
Controlled by Aymoré CFI | |||||
Banco PSA | Bank | 105 | - | 0.00% | 50.00% |
Banco Hyundai Capital Brasil S.A. | Bank | 150,000 | - | 0.00% | 50.00% |
Solution 4Fleet Consultoria Empresarial S.A. | Technology | 328 | - | 0.00% | 80.00% |
Controlled by Santander Leasing | |||||
Banco Bandepe S.A. | Bank | 3,589 | - | 0.00% | 100.00% |
Santander Distribuidora de Títulos E Valores Mobiliários S.A. | Leasing | 461 | - | 0.00% | 100.00% |
Controlled by Sancap | |||||
Santander Capitalização S.A. | Capitalization | 64,615 | - | 0.00% | 100.00% |
Evidence Previdência S.A. | Private Pension | 42,819,564 | - | 0.00% | 100.00% |
Controlled by Santander Holding Imobiliária S.A. | |||||
Summer Empreendimentos Ltda. | Real Estate | 17,084 | - | 0.00% | 100.00% |
Apê11 Tecnologia e Negócios Imobiliários S.A. | Technology | 3,808 | - | 0.00% | 90.00% |
Controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | |||||
Return Capital Serviços de Recuperação de Créditos S.A. | Collection and Recover of Credit Management | 200 | - | 0.00% | 100.00% |
Liderança Serviços Especializados em Cobranças Ltda. | Collection and Recover of Credit Management | 250 | - | 0.00% | 100.00% |
Controlled by Santander Distribuidora de Títulos E Valores Mobiliários S.A. | |||||
Toro Corretora de Títulos de Valores Mobiliários Ltda. | Broker | 21,726 | - | 0.00% | 63.00% |
Toro Investimentos S.A. | investments | 44,101 | - | 0.00% | 2.06% |
Controlled by Toro Corretora de Títulos de Valores Mobiliários Ltda. | |||||
Toro Investimentos S.A. | investments | 228,461 | - | 0.00% | 96.57% |
Jointly Controlled Companies by Sancap | |||||
Santander Auto S.A. | Technology | 22,452 | - | 0.00% | 50.00% |
Controlled by Toro Investimentos S.A. | |||||
Monetus Investimentos S.A. | investments | 918,264 | - | 0.00% | 100.00% |
Mobills Labs Soluções em Tecnologia Ltda. | Technology | 1,122,000 | - | 0.00% | 100.00% |
Controlled by Mobills Labs Soluções em Tecnologia Ltda. | |||||
Mob Soluções em Tecnologia Ltda. | Technology | 20 | - | 0.00% | 100.00% |
Controlled by Monetus Investimentos S.A. | |||||
Monetus Corretora de Seguros Ltda. | Broker | 510 | - | 0.00% | 100.00% |
Quantity of Shares or Quotas Owned (in Thousands) | 06/30/2022 | ||||
Investments | Activity | Common Shares and Quotas | Preferred Shares | Direct Participation | Consolidated Participation |
Jointly Controlled Companies by Banco Santander | |||||
Estruturadora Brasileira de Projetos S.A. - EBP (EBP) | Other Activities | 5,076 | 1,736 | 11.11% | 11.11% |
Gestora de Inteligência de Crédito S.A. (Gestora de Crédito) | Credit Bureau | 5,090 | 4,809 | 19.45% | 19.45% |
Campo Grande Empreendimentos Ltda. | Other Activities | 255 | - | 25.32% | 25.32% |
CIP S.A. | Other Activities | 9,114 | - | 17.87% | 17.87% |
Jointly Controlled Companies by Santander Corretora de Seguros | |||||
Webmotors S.A. | Technology | 425,126,827 | - | 0.00% | 70.00% |
Tecnologia Bancária S.A. (TecBan) | Other Activities | 743,944 | 68,771 | 0.00% | 18.98% |
PSA Corretora de Seguros e Serviços Ltda. (PSA Corretora de Seguros) | Insurance Broker | 450 | - | 0.00% | 50.00% |
Hyundai Corretora de Seguros Ltda. | Insurance Broker | 1,000 | - | 0.00% | 50.00% |
CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitais S.A. | Other Activities | 22,454 | - | 0.00% | 20.00% |
Jointly Controlled Companies by Webmotors S.A. | |||||
Loop Gestão de Pátios S.A. (Loop) | Services provision | 23,243 | - | 0.00% | 51.00% |
Car10 Tecnologia e Informação S.A. (Car10) | Technology | 6,591 | - | 0.00% | 66.67% |
Jointly Controlled Companies by TecBan | |||||
Tbnet Comércio, Locação e Administração Ltda. (Tbnet) | Other Activities | 542,004 | - | 0.00% | 100.00% |
TecBan Serviços Integrados Ltda. | Other Activities | 1,000 | - | 0.00% | 100.00% |
Jointly Controlled Companies by Tebnet | |||||
Tbforte Segurança e Transporte de Valores Ltda. (Tbforte) | Other Activities | 517,505 | - | 0.00% | 100.00% |
Consolidated Investment Funds
• Santander Investment Fund Amazonas Multimercado Private Credit for Investment Abroad (Santander FI Amazonas);
• Santander Investment Fund Diamantina Multimercado Private Credit for Investment Abroad (Santander FI Diamantina);
• Santander Investment Fund Guarujá Multimercado Private Credit for Investment Abroad (Santander FI Guarujá);
• Santander Investment Fund Unix Multimercado Crédito Privado (Santander FI Unix);
• Santander Investment Fund SBAC Referenciado DI Crédito Privado (Santander FI SBAC);
• Santander Paraty QIF PLC (Santander Paraty) (4);
• Sale of Vehicles Credit Rights Investment Fund (Sale of FIDC Vehicles) (1);
• Credit Rights Investment Fund RN Brasil - Vehicle Financing (FI RN Brasil - Vehicle Financing) (2);
• Prime 16 – Real Estate Investment Fund (current name of BRL V - Fundo de Investimento Imobiliário - FII) (3);
• Santander FI Hedge Strategies Fund (Santander FI Hedge Strategies) (4);
• Multisegment Credit Rights Investment Fund NPL Ipanema VI - Non-Standardized (Ipanema Investment Fund NPL VI) (5);
• Santander Hermes Multimercado Private Credit Infrastructure Investment Fund;
• Wholesale Credit Rights Investment Fund – Non-Standardized;
• Current - Multimarket Investment Fund Private Credit Investment Abroad (6); and
• Verbena FCVS - Credit Rights Investment Fund (7).
(1) Renault automaker (an entity not belonging to the Santander Conglomerate) sells its trade notes to the Fund. This Fund exclusively buys duplicates from the automaker Renault. In turn, Banco RCI Brasil S.A. holds 100% of its subordinated shares.
(2) Banco RCI Brasil S.A. sells receivables (CDC Portfolio) to FI RN Brasil - Vehicle Financing. Senior shares have only one investor. Banco RCI Brasil S.A. holds 100% of the subordinated shares.
(3) Banco Santander was the creditor of certain overdue credit operations that had real estate as collateral. The operation for the recovery of these credits consists of the contribution of the properties in guarantee to the capital of the Real Estate Investment Fund and the consequent transfer of the Fund's shares to Banco Santander, through payment of the aforementioned credit operations.
(4) Banco Santander, through its subsidiaries, owns the risks and benefits of Santander Paraty and the Santander FI Hedge Strategies Subfund, resident in Ireland, both of which are fully consolidated in their Consolidated Financial Statements. Santander Paraty does not have its own equity position, and all records come from the financial position of Santander FI Hedge Strategies.
(5) Atual Serviços de Recovery de Créditos e Meios Digitais S.A. (current corporate name of Atual Companhia Securitizadora de Créditos Financeiros), a company that acquired certain credit operations from Banco Santander (overdue for more than 360 days) and controlled by Banco Santander, holds 100% of the shares of this fund.
(6) This fund started to be consolidated in August 2020 and is controlled through Atual Serviços de Recovery de Créditos e Meios Digitais S.A.
(7) This fund was consolidated in February 2021, controlled by Banco Santander, which holds 100% of the shares in this fund.
b) Composition of Investments
Bank | ||||||||||||
Adjusted Stockholders' Equity | Net Income (Loss) Adjusted | Investments Value | Equity Accounting Results | |||||||||
06/30/2022 | 01/01 to 06/30/2022 | 06/30/2022 | 12/31/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |||||||
Controlled by Banco Santander | ||||||||||||
Santander Leasing | 11,378,499 | 325,246 | 11,378,499 | 11,172,028 | 325,246 | 96,061 | ||||||
Banco Bandepe S.A. | - | - | - | - | - | 36,530 | ||||||
Santander Brasil EFC | - | - | - | - | - | (35,574) | ||||||
Santander Corretora de Seguros | 5,164,786 | 567,132 | 5,169,861 | 4,609,417 | 567,132 | 491,782 | ||||||
Getnet S.A. | - | - | - | - | - | 56,220 | ||||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | 3,443,986 | 153,607 | 3,443,986 | 2,690,379 | 153,607 | 34,018 | ||||||
Aymoré CFI | 12,680,583 | 375,381 | 12,680,583 | 2,305,203 | 375,381 | 730,031 | ||||||
Sancap | 1,302,364 | 417,759 | 1,302,364 | 992,882 | 417,759 | 155,311 | ||||||
Santander CCVM | 873,681 | 66,863 | 873,681 | 807,096 | 66,863 | 49,155 | ||||||
Banco RCI Brasil S.A. | 1,552,440 | 56,299 | 619,283 | 608,156 | 22,458 | 35,984 | ||||||
Santander Brasil Consórcio | 1,241,821 | 227,841 | 1,241,821 | 1,013,980 | 227,841 | 161,113 | ||||||
CIP S.A. | 2,088,955 | 94,196 | 373,296 | - | 16,832 | - | ||||||
Outros | 2,064,548 | 231,680 | 2,022,891 | 1,759,775 | 281,046 | 148,702 | ||||||
Total | 41,791,663 | 2,516,004 | 39,106,265 | 25,958,916 | 2,454,165 | 1,959,333 |
Consolidated | ||||||||||||
Adjusted Stockholders' Equity | Net Income (Loss) Adjusted | Investments Value | Equity Accounting Results | |||||||||
06/30/2022 | 01/01 to 06/30/2022 | 06/30/2022 | 12/31/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |||||||
Jointly Controlled Companies Directly and Indirectly by Banco Santander | ||||||||||||
TecBan | 953,622 | 59,649 | 180,997 | 169,676 | 11,321 | 28,501 | ||||||
Gestora de Crédito | 59,361 | (50,066) | 11,872 | 13,522 | (10,013) | (7,209) | ||||||
Webmotors S.A. | 299,401 | 28,306 | 209,580 | 189,317 | 19,813 | 17,070 | ||||||
EBP | 11,472 | 151 | 1,275 | 1,258 | 17 | (15) | ||||||
Solution 4Fleet | - | - | - | 11,603 | - | - | ||||||
Santander Auto | 52,191 | 10,622 | 26,095 | 21,262 | 5,311 | 2,167 | ||||||
Hyundai Corretora de Seguros Ltda. | 2,347 | (172) | 1,174 | 1,260 | (86) | 133 | ||||||
PSA Corretora | 1,488 | 407 | 744 | 540 | 204 | (106) | ||||||
CIP S.A. | 2,088,955 | 94,196 | 373,296 | - | 16,833 | - | ||||||
CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitais S.A. | 210,332 | - | 42,067 | - | - | - | ||||||
Others | - | - | - | 255 | - | (11,975) | ||||||
Total | 3,679,169 | 143,093 | 847,100 | 408,693 | 43,400 | 28,566 |
Bank | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Cost | Depreciation | Net | Net | |||||
Real Estate | 2,457,105 | (946,334) | 1,510,771 | 1,546,882 | ||||
Land | 637,457 | - | 637,457 | 640,772 | ||||
Buildings | 1,819,648 | (946,334) | 873,314 | 906,110 | ||||
Others Fixed Assets | 13,408,848 | (9,124,330) | 4,284,518 | 4,519,804 | ||||
Installations, Furniture and Equipment | 5,579,067 | (3,722,635) | 1,856,432 | 1,982,893 | ||||
Data Processing Equipment | 2,482,838 | (1,590,178) | 892,660 | 927,367 | ||||
Leasehold Improvements | 4,395,083 | (3,213,660) | 1,181,423 | 1,271,430 | ||||
Security and Communication Equipment | 877,670 | (569,215) | 308,455 | 282,965 | ||||
Others | 74,190 | (28,642) | 45,548 | 55,149 | ||||
Total | 15,865,953 | (10,070,664) | 5,795,289 | 6,066,686 | ||||
Consolidated | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Cost | Depreciation | Net | Net | |||||
Real Estate | 2,737,773 | (1,012,686) | 1,725,087 | 1,774,302 | ||||
Land | 707,226 | - | 707,226 | 712,200 | ||||
Buildings | 2,030,547 | (1,012,686) | 1,017,861 | 1,062,102 | ||||
Others Fixed Assets | 13,650,425 | (9,268,917) | 4,381,508 | 4,610,046 | ||||
Installations, Furniture and Equipment | 5,622,285 | (3,752,310) | 1,869,975 | 1,983,785 | ||||
Data Processing Equipment | 2,539,875 | (1,625,507) | 914,368 | 951,003 | ||||
Leasehold Improvements | 4,512,268 | (3,289,743) | 1,222,525 | 1,316,232 | ||||
Security and Communication Equipment | 881,720 | (572,630) | 309,090 | 283,684 | ||||
Others | 94,277 | (28,727) | 65,550 | 75,342 | ||||
Total | 16,388,198 | (10,281,603) | 6,106,595 | 6,384,348 |
Bank | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Cost | Amortization | Net | Net | |||||
Goodwill on Acquired Companies | 27,220,515 | (26,617,874) | 602,641 | 702,497 | ||||
Other Intangible Assets | 11,240,739 | (6,549,473) | 4,691,266 | 4,568,941 | ||||
Acquisition and Development of Software | 7,149,537 | (4,204,954) | 2,944,583 | 2,711,778 | ||||
Exclusivity Contracts for Provision of Banking Services | 3,917,822 | (2,222,360) | 1,695,462 | 1,792,934 | ||||
Others | 173,380 | (122,159) | 51,221 | 64,229 | ||||
Total | 38,461,254 | (33,167,347) | 5,293,907 | 5,271,438 | ||||
Consolidated | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Cost | Amortization | Net | Net | |||||
Goodwill on Acquired Companies | 28,271,901 | (26,868,565) | 1,403,336 | 1,434,721 | ||||
Other Intangible Assets | 11,637,037 | (6,794,933) | 4,842,104 | 4,687,979 | ||||
Acquisition and Development of Software | 7,528,745 | (4,420,105) | 3,108,639 | 2,845,136 | ||||
Exclusivity Contracts for Provision of Banking Services | 3,917,822 | (2,222,360) | 1,695,462 | 1,792,935 | ||||
Others | 190,470 | (152,467) | 38,002 | 49,908 | ||||
Total | 39,908,938 | (33,663,498) | 6,245,440 | 6,122,700 |
For the semester ended June 30, 2022, there was no impairment.
a) Opening of Equity Accounts
Bank | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Without Maturity | Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | |||||||
Deposits | 103,154,119 | 99,601,480 | 95,917,394 | 117,268,106 | 415,941,099 | 406,882,409 | ||||||
Demand Deposits | 41,689,469 | - | - | - | 41,689,469 | 40,776,429 | ||||||
Savings Deposits | 61,398,932 | - | - | - | 61,398,932 | 65,220,066 | ||||||
Interbank Deposits | - | 2,329,249 | 1,956,684 | 286,137 | 4,572,070 | 5,621,237 | ||||||
Time Deposits (1) | 65,718 | 97,272,231 | 93,960,710 | 116,981,969 | 308,280,628 | 295,264,677 | ||||||
Money Market Funding | - | 102,885,163 | 747,409 | 731,632 | 104,364,205 | 100,870,087 | ||||||
Own Portfolio | - | 57,662,202 | 747,409 | 51,289 | 58,460,901 | 75,114,059 | ||||||
Government Securities | - | 46,013,933 | 540,310 | 51,200 | 46,605,444 | 61,635,928 | ||||||
Debt Securities in Issue | - | 5,054 | - | - | 5,054 | - | ||||||
Others | - | 11,643,215 | 207,098 | 88 | 11,850,401 | 13,478,131 | ||||||
Third Parties | - | 28,315,700 | - | - | 28,315,700 | 6,859,710 | ||||||
Linked to Trading Portfolio Operations | - | 16,907,261 | - | 680,344 | 17,587,605 | 18,896,318 | ||||||
Funds from Acceptance and Issuance of Securities | - | 11,809,417 | 28,318,203 | 94,502,759 | 134,630,379 | 115,842,979 | ||||||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 8,650,407 | 23,323,238 | 58,607,310 | 90,580,955 | 73,517,897 | ||||||
Real Estate Credit Notes - LCI (2) | - | 3,279,147 | 7,633,441 | 23,176,341 | 34,088,929 | 28,924,170 | ||||||
Agribusiness Credit Notes - LCA | - | 3,739,104 | 10,226,814 | 5,265,787 | 19,231,705 | 16,989,434 | ||||||
Treasury Bills - LF (3) | - | 1,534,761 | 5,407,035 | 26,059,346 | 33,001,142 | 25,074,264 | ||||||
Guaranteed Real Estate Credit Notes - LIG (4) | - | 97,395 | 55,948 | 4,105,836 | 4,259,179 | 2,530,030 | ||||||
Securities Issued Abroad | - | 2,439,976 | 3,767,256 | 32,013,798 | 38,221,030 | 38,427,171 | ||||||
Funding by Structured Operations Certificates | - | 719,034 | 1,227,709 | 3,881,651 | 5,828,394 | 3,897,911 | ||||||
Borrowings and Onlendings | - | 14,924,828 | 47,049,958 | 25,744,303 | 87,719,089 | 91,581,834 | ||||||
Foreign Borrowings | - | 13,370,026 | 44,746,516 | 18,395,544 | 76,512,086 | 79,728,750 | ||||||
Import and Export Financing Lines | - | 6,970,280 | 11,663,856 | 2,091,211 | 20,725,347 | 50,769,169 | ||||||
Other Credit Lines | - | 6,399,746 | 33,082,660 | 16,304,333 | 55,786,739 | 28,959,581 | ||||||
Domestic Onlendings | - | 1,554,802 | 2,303,442 | 7,348,759 | 11,207,003 | 11,853,084 | ||||||
Total | 103,154,119 | 229,220,888 | 172,032,964 | 238,246,800 | 742,654,772 | 715,177,309 |
Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Without Maturity | Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | |||||||
Deposits | 102,803,241 | 99,482,298 | 95,675,966 | 117,145,684 | 415,107,189 | 403,639,687 | ||||||
Demand Deposits | 41,338,591 | - | - | - | 41,338,591 | 40,454,250 | ||||||
Savings Deposits | 61,398,932 | - | - | - | 61,398,932 | 65,220,066 | ||||||
Interbank Deposits | - | 1,871,959 | 1,993,021 | - | 3,864,980 | 4,723,077 | ||||||
Time Deposits (1) | 65,718 | 97,610,339 | 93,682,945 | 117,145,684 | 308,504,686 | 293,242,294 | ||||||
Money Market Funding | - | 89,004,578 | 419,969 | 680,432 | 90,104,979 | 95,648,600 | ||||||
Own Portfolio | - | 44,954,445 | 419,969 | 88 | 45,374,502 | 71,192,568 | ||||||
Government Securities | - | 33,306,176 | 212,871 | - | 33,519,047 | 57,714,437 | ||||||
Debt Securities in Issue | - | 5,054 | - | - | 5,054 | - | ||||||
Others | - | 11,643,215 | 207,098 | 88 | 11,850,401 | 13,478,131 | ||||||
Third Parties | - | 27,142,872 | - | - | 27,142,872 | 5,559,714 | ||||||
Linked to Trading Portfolio Operations | - | 16,907,261 | - | 680,344 | 17,587,605 | 18,896,318 | ||||||
Funds from Acceptance and Issuance of Securities | - | 11,921,039 | 28,047,109 | 74,722,180 | 114,690,328 | 95,380,860 | ||||||
Exchange Acceptances | - | 90,176 | 192,211 | 940,805 | 1,223,192 | 1,361,443 | ||||||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 9,172,861 | 24,379,885 | 61,188,121 | 94,740,867 | 77,169,438 | ||||||
Real Estate Credit Notes - LCI (2) | - | 3,279,147 | 7,633,441 | 23,176,341 | 34,088,929 | 28,924,170 | ||||||
Agribusiness Credit Notes - LCA | - | 3,739,104 | 10,226,814 | 5,265,787 | 19,231,705 | 16,989,434 | ||||||
Treasury Bills - LF (3) | - | 2,057,215 | 6,463,682 | 28,640,157 | 37,161,054 | 28,725,804 | ||||||
Guaranteed Real Estate Credit Notes - LIG (4) | - | 97,395 | 55,948 | 4,105,836 | 4,259,179 | 2,530,030 | ||||||
Securities Issued Abroad | - | 1,938,968 | 2,247,304 | 8,711,603 | 12,897,875 | 12,952,068 | ||||||
Funding by Structured Operations Certificates | - | 719,034 | 1,227,709 | 3,881,651 | 5,828,394 | 3,897,911 | ||||||
Borrowings and Onlendings | - | 14,948,054 | 47,049,958 | 25,744,303 | 87,742,315 | 91,586,750 | ||||||
Domestic Borrowings | - | 23,226 | - | - | 23,226 | 4,916 | ||||||
Foreign Borrowings | - | 13,370,026 | 44,746,516 | 18,395,544 | 76,512,086 | 79,728,750 | ||||||
Import and Export Financing Lines | - | 6,970,280 | 11,663,856 | 2,091,211 | 20,725,347 | 50,769,169 | ||||||
Other Credit Lines | - | 6,399,746 | 33,082,660 | 16,304,333 | 55,786,739 | 28,959,581 | ||||||
Domestic Onlendings | - | 1,554,802 | 2,303,442 | 7,348,759 | 11,207,003 | 11,853,084 | ||||||
Total | 102,803,241 | 215,355,969 | 171,193,002 | 218,292,599 | 707,644,811 | 686,255,896 |
(1) They consider the maturities established in the respective investments, with the possibility of immediate withdrawal, in advance of their due date.
(2) Mortgage letters of credit are fixed income securities backed by real estate credits and guaranteed by mortgage or by fiduciary sale of immovable property. On June 30, 2022, they mature between 2022 and 2028.
(3) The main characteristics of financial bills are a minimum term of two years, a minimum nominal value of R$50 and early redemption permission of only 5% of the amount issued. On June 30, 2022, they mature between 2022 and 2031.
(4) Guaranteed Real Estate Bonds are fixed income securities backed by real estate credits guaranteed by the issuer and by a pool of real estate credits separated from the issuer's other assets. On June 30, 2022, they mature between 2022 and 2035 (12/31/2021 - with maturity between 2022 and 2035).
In the Bank and in the Consolidated, export and import financing lines are funds raised from financial institutions abroad, intended for investment in commercial exchange operations, related to the discount of export bills and pre-financing for exports and imports, whose maturities run through 2031 (12/31/2021 - until 2024) and are subject to financial charges, corresponding to exchange rate variation plus interest ranging from 0.42% to 5.7% p.a. (12/31/2021 - from 0.33% p.a. to 4.75% p.a.).
The onlending obligations of the country - official institutions are subject to financial charges corresponding to the TJLP, exchange variation of the BNDES currency basket or the exchange variation of the US Dollar, plus interest, in accordance with the BNDES System's operating policies.
Banco | Consolidado | |||||||
Eurobonds | Emissão | Vencimento | Moeda | Taxa de Juros (a.a.) | 6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 |
Eurobonds | 2019 | 2022 | USD | 4% | - | 28,088 | - | - |
Eurobonds | 2020 | 2022 | USD | 4% | - | 308,279 | - | 306,253 |
Eurobonds | 2020 | 2022 | USD | CDI+6.4% | - | 75,485 | - | - |
Eurobonds | 2020 | 2023 | USD | CDI+6.4% | - | 60,388 | - | - |
Eurobonds | 2021 | 2022 | USD | 4% | - | 42,728 | - | - |
Eurobonds | 2018 | 2025 | USD | 4% | 109,914 | 117,150 | - | 117,150 |
Eurobonds | 2018 | 2025 | USD | 0% a 4.4% | 109,246 | 771,300 | 109,246 | 771,300 |
Eurobonds | 2019 | 2022 | USD | 0% a 4.4% | 65,106 | 106,805 | 65,106 | - |
Eurobonds | 2019 | 2023 | USD | 0% a 4.4% | 75,723 | 796,097 | - | - |
Eurobonds | 2019 | 2023 | USD | CDI + 2.65% | 3,193 | 4,465 | - | - |
Eurobonds | 2019 | 2024 | USD | 4% | 111,464 | 133,796 | - | - |
Eurobonds | 2019 | 2024 | USD | 0% a 4.4% | 997,725 | 2,193,989 | - | - |
Eurobonds | 2019 | 2024 | USD | CDI + 2.65% | 21,365 | 26,424 | - | - |
Eurobonds | 2019 | 2025 | USD | 0% a 4.4% | 274,842 | 369,554 | 211,730 | 225,533 |
Eurobonds | 2019 | 2026 | USD | 4% | 76,112 | 75,716 | 10,251 | 75,716 |
Eurobonds | 2019 | 2026 | USD | 0% a 4.4% | 267,492 | 293,644 | - | - |
Eurobonds | 2019 | 2027 | USD | 0% a 4.4% | 621,042 | 643,846 | 610,950 | 632,831 |
Eurobonds | 2020 | 2022 | USD | 0% a 4.4% | 220,054 | 1,703,339 | - | - |
Eurobonds | 2020 | 2023 | USD | 4% | 4,722 | 4,627 | - | - |
Eurobonds | 2020 | 2023 | USD | 0% a 4.4% | 1,001,292 | 3,220,706 | 395,362 | 455,666 |
Eurobonds | 2020 | 2023 | USD | CDI + 2.65% | 45,400 | - | - | - |
Eurobonds | 2020 | 2024 | USD | 4% | 6,400 | 8,053 | - | - |
Eurobonds | 2020 | 2024 | USD | 0% a 4.4% | 354,722 | 2,464,322 | - | - |
Eurobonds | 2020 | 2024 | USD | CDI+6.4% | 117,796 | 143,744 | - | - |
Eurobonds | 2020 | 2025 | USD | 4% | 10,724 | 12,724 | - | - |
Eurobonds | 2020 | 2025 | USD | 0% a 4.4% | 888,576 | 4,381,601 | 43,787 | 46,655 |
Eurobonds | 2020 | 2026 | USD | 4% | 14,780 | 16,760 | - | - |
Eurobonds | 2020 | 2026 | USD | 0% a 4.4% | 6,224 | 7,047 | - | - |
Eurobonds | 2020 | 2027 | USD | 0% a 4.4% | 18,737 | 19,330 | - | - |
Eurobonds | 2021 | 2022 | USD | 0% a 4.4% | 518,932 | 2,854,297 | 309,695 | 2,005,534 |
Eurobonds | 2021 | 2022 | USD | Até 9% | 65,398 | 63,104 | 20,875 | 41,749 |
Eurobonds | 2021 | 2022 | USD | CDI + 2.65% | 206,095 | 699,890 | 150,854 | 181,116 |
Eurobonds | 2021 | 2022 | USD | CDI+1.9% | 21,693 | 221,194 | 5,279 | 205,624 |
Eurobonds | 2021 | 2022 | USD | CDI+6.4% | 5,577 | 30,459 | - | - |
Eurobonds | 2021 | 2023 | USD | 0% a 4.4% | 1,451,863 | 1,385,937 | 190,072 | 408,824 |
Eurobonds | 2021 | 2023 | USD | CDI + 2.65% | 454,620 | 157,933 | 205,047 | 5,316 |
Eurobonds | 2021 | 2023 | USD | CDI+1.9% | 215,861 | 157,370 | 147,712 | 157,370 |
Eurobonds | 2021 | 2024 | USD | 4% | 62,989 | 61,754 | - | - |
Eurobonds | 2021 | 2024 | USD | 0% a 4.4% | 2,515,678 | 2,316,303 | 63,925 | 246,192 |
Eurobonds | 2021 | 2024 | USD | Até 9% | 8,599 | 8,157 | - | - |
Eurobonds | 2021 | 2024 | USD | CDI + 2.65% | 581,272 | 1,043,471 | - | - |
Eurobonds | 2021 | 2024 | USD | CDI+1.9% | 53,866 | 1,233 | - | - |
Eurobonds | 2021 | 2025 | USD | 0% a 4.4% | 1,755,626 | 1,601,271 | 78,570 | 593,036 |
Eurobonds | 2021 | 2025 | USD | CDI + 2.65% | 131,600 | 71,890 | - | - |
Eurobonds | 2021 | 2025 | USD | CDI+1.9% | 155,907 | 53,765 | - | - |
Eurobonds | 2021 | 2026 | USD | 0% a 4.4% | 8,154,639 | 5,963,357 | 802,521 | 3,890,578 |
Eurobonds | 2021 | 2026 | USD | CDI + 2.65% | 1,358,647 | 692,299 | 663,426 | 210,639 |
Eurobonds | 2021 | 2026 | USD | CDI+1.9% | 260,480 | 140,870 | - | - |
Eurobonds | 2021 | 2027 | USD | 4% | 66,227 | 71,252 | - | - |
Eurobonds | 2021 | 2027 | USD | 0% a 4.4% | 229,737 | 235,265 | - | 101,029 |
Eurobonds | 2021 | 2028 | USD | 0% a 4.4% | 149,933 | 173,048 | - | - |
Eurobonds | 2021 | 2028 | USD | Até 9% | 30,148 | 30,126 | - | 30,126 |
Eurobonds | 2021 | 2028 | USD | CDI + 2.65% | 110,108 | 110,038 | - | - |
Eurobonds | 2021 | 2028 | USD | CDI+1.9% | 53,691 | 9,051 | - | - |
Eurobonds | 2021 | 2028 | USD | CDI+6.4% | 26,038 | 26,018 | - | 26,018 |
Eurobonds | 2021 | 2031 | USD | 0% a 4.4% | 2,483,209 | 2,217,812 | 2,161,792 | 2,217,811 |
Eurobonds | 2022 | 2022 | USD | 0% a 4.4% | 2,379,216 | - | 2,270,251 | - |
Eurobonds | 2022 | 2022 | USD | Até 9% | 60,708 | - | 60,708 | - |
Eurobonds | 2022 | 2022 | USD | CDI+1.9% | 329,038 | - | 194,351 | - |
Eurobonds | 2022 | 2023 | USD | 0% a 4.4% | 907,568 | - | 899,037 | - |
Eurobonds | 2022 | 2023 | USD | Até 9% | 9,638 | - | 9,638 | - |
Eurobonds | 2022 | 2023 | USD | CDI+1.9% | 378,708 | - | 228,291 | - |
Eurobonds | 2022 | 2024 | USD | 0% a 4.4% | 1,127,166 | - | 1,049,145 | - |
Eurobonds | 2022 | 2024 | USD | CDI+1.9% | 1,419,210 | - | 428,387 | - |
Eurobonds | 2022 | 2025 | USD | 0% a 4.4% | 392,355 | - | 136,585 | - |
Eurobonds | 2022 | 2025 | USD | CDI+1.9% | 983,485 | - | - | - |
Eurobonds | 2022 | 2026 | USD | 0% a 4.4% | 39,080 | - | - | - |
Eurobonds | 2022 | 2026 | USD | CDI+1.9% | 413,167 | - | - | - |
Eurobonds | 2022 | 2027 | USD | 0% a 4.4% | 786,807 | - | - | - |
Eurobonds | 2022 | 2027 | USD | CDI+1.9% | 850,085 | - | - | - |
Eurobonds | 2022 | 2029 | USD | 0% a 4.4% | 78,077 | - | - | - |
Eurobonds | 2022 | 2029 | USD | CDI+1.9% | 141,107 | - | - | - |
Eurobonds | 2022 | 2035 | USD | CDI+1.9% | 1,375,284 | - | 1,375,284 | - |
Total | 38,221,782 | 38,427,171 | 12,897,874 | 12,952,066 |
b) Opening profit and loss accounts
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Time Deposits (1) (2) | 9,580,425 | 1,983,539 | 8,496,103 | 2,789,648 |
Savings Deposits | 2,150,269 | 702,944 | 2,150,269 | 702,944 |
Interbank Deposits | 135,489 | 70,800 | 177,064 | 75,615 |
Money Market Funding | 5,488,102 | 1,756,853 | 5,236,984 | 1,681,644 |
Upgrade and Provisions Interest and Pension Plans and Capitalization | 2,803 | - | 123,010 | 89,033 |
Acceptance and Issuance of Securities | 3,796,663 | - | 4,029,467 | - |
Others (3) | (533,568) | (305,318) | (522,502) | (230,721) |
Total | 20,620,183 | 4,208,818 | 19,690,395 | 5,108,163 |
(1) In the Bank and Consolidated, includes the recording of interest in the amount of R$213,612 (2021 - R$232,342), referring to the issuance of a Tier I and II Eligible Debt Instrument (Note 18.b).
(2) Includes exchange variation expense in the amount of R$450,585 in the Bank and Consolidated (2021 - exchange variation expense in the amount of R$307,569 in the Bank and Consolidated).
(3) On June 30, 2022 includes exchange variation expense in the amount of R$786,439 in the Bank and Consolidated (2021 – Exchange variation expense in the amount of R$2,076,330).
18. Other Financial Liabilities
a. Composition
Bank | |||||||
06/30/2022 | 12/31/2021 | ||||||
Total | Total | ||||||
Foreign Exchange Portfolio (Note 9 ) | 49,409,918 | 57,558,791 | |||||
Trading and Intermediation of Values | 269,051 | 2,949,826 | |||||
Debt Instruments Eligible to Compose Capital | 19,131,625 | 19,641,408 | |||||
Collected Taxes and Other | 6,998,851 | 196,811 | |||||
Third-Party Funds in Transit | 2,682,856 | 16,890 | |||||
Receipts and Payments Pending Settlement | 5,540,913 | 5,425,924 | |||||
Total | 84,033,214 | 85,789,650 |
Consolidated | |||||||
06/30/2022 | 12/31/2021 | ||||||
Total | Total | ||||||
Foreign Exchange Portfolio (Note 9 ) | 49,409,918 | 57,558,791 | |||||
Trading and Intermediation of Values (1) | 1,614,239 | 4,182,663 | |||||
Debt Instruments Eligible to Compose Capital | 19,131,625 | 19,641,408 | |||||
Collected Taxes and Other | 7,040,777 | 248,306 | |||||
Third-Party Funds in Transit | 2,682,856 | 16,890 | |||||
Receipts and Payments Pending Settlement | 5,540,913 | 5,425,924 | |||||
Total | 85,420,328 | 87,073,982 |
(1) In 2021, due to better liquidity conditions observed in the market for electricity trading operations for certain maturities, management reclassified contracts maturing up to 2 years from level 3 to level 2 (note 30.c) and revisited the accounting treatment in relation to electricity commercialization contracts, which no longer include the "principal" amount and, therefore, only the fair value and interest adjustments determined in these operations are recorded in equity accounts.
b. Debt Instruments Eligible to Capital
The details of the balance of the item Debt Instruments Eligible to Capital referring to the issuance of equity instruments to compose Level I and Level II of the PR due to the Capital Optimization Plan, are as follows:
Bank/Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Debt Instruments Eligible to Compose Capital | Issuance | Maturity | Amount (Million) | Interest Rate (p.a.) (1) | Total | Total | ||||||
Tier I (1) | November - 18 | No Maturity (Perpetual) | $1,250 | 7.250% | 6,616,067 | 7,050,080 | ||||||
Tier II (1) | November - 18 | November - 28 | $1,250 | 6.125% | 6,605,427 | 7,038,527 | ||||||
Financial Bills - Tier II (2) | November - 21 | November - 31 | $5,300 | CDI+2% | 5,695,392 | 5,351,046 | ||||||
Financial Bills – Tier II (2) | December - 21 | December - 31 | $200 | CDI+2% | 214,739 | 201,755 | ||||||
Total | 19,131,625 | 19,641,408 |
(1) The issues were carried out through the Cayman Branch and there is no Income Tax at source, and interest is paid semiannually, as of May 8, 2019.
(2) Financial Bills issued in November 2021 have a redemption and repurchase option.
Notes have the following common characteristics:
(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand which exceeds such minimum value;
(b) The Notes may be repurchased or redeemed by Banco Santander after the 5th (fifth) anniversary from the date of issue of the Notes, at the Bank's sole discretion or due to changes in the tax legislation applicable to the Notes; or at any time, due to the occurrence of certain regulatory events.
Bank | Consolidated | ||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | ||||
Provision Technical for Capitalization Operations | - | - | 3,997,328 | 3,747,397 | |||
Payables for Credit Cards | 38,910,115 | 40,390,304 | 39,177,628 | 40,674,867 | |||
Provision for Tax Risks and Legal Obligations (Note 20.b) | 4,579,072 | 4,312,234 | 7,078,921 | 6,748,684 | |||
Provision for Legal and Administrative Proceedings - | 4,898,609 | 5,033,675 | 5,205,377 | 5,325,716 | |||
Provision for Financial Guarantees | 314,445 | 324,728 | 314,446 | 324,728 | |||
Employee Benefit Plans (Note 29) | 1,686,673 | 2,699,902 | 1,703,745 | 2,728,125 | |||
Payables for Acquisition of Assets and Rights | 4,789 | 22,307 | 4,789 | 22,307 | |||
Reserve for Legal and Administrative Proceedings - Responsibility of | 496 | 496 | 496 | 496 | |||
Accrued Liabilities | |||||||
Personnel Expenses | 1,737,843 | 1,794,489 | 2,043,068 | 2,077,434 | |||
Administrative Expenses | 204,447 | 254,802 | 354,287 | 393,089 | |||
Others Payments | 64,460 | 84,847 | 270,137 | 223,968 | |||
Creditors for Unreleased Funds | 1,029,380 | 1,485,921 | 1,029,380 | 1,485,921 | |||
Provision of Payment Services | 580,117 | 619,570 | 580,117 | 619,570 | |||
Suppliers | 632,946 | 777,377 | 1,191,773 | 1,318,328 | |||
Social and Statutory | 816,779 | 1,149,828 | 942,174 | 1,468,031 | |||
Others (1) | 6,637,063 | 6,568,755 | 13,298,872 | 12,778,291 | |||
Total | 62,097,234 | 65,519,235 | 77,192,538 | 79,936,952 |
(1) Includes impacts of the exchange variation referring to Notes.
a) Provision for Financial Guarantees Provided
The classification of operations involving guarantees provided for the constitution of provisions is based on the estimate of the risk involved. It results from the process of evaluating the quality of customers and operations, by a statistical model based on quantitative and qualitative information or by a specialized credit analyst, who allows them to be classified according to their probability of default, based on objective internal and market variables (bureaus), previously identified as predictors of the probability of default. After this assessment, operations are classified according to provisioning ratings, based on CMN Resolution No. 2,682/1999. Through this analysis, the provision amounts to cover each operation are recorded, considering the type of guarantee provided, as required by CMN Resolution No. 4,512/2016.
Bank/Consolidated | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Type of Financial Guarantee | Balance Guarantees Provided | Provision | Balance Guarantees Provided | Provision | ||||
Linked to International Merchandise Trade | 4,944,258 | 24,743 | 6,244,755 | 28,506 | ||||
Linked to Bids, Auctions, Provision of Services or Execution of Works | 6,090,073 | 4,767 | 6,796,175 | 4,198 | ||||
Linked to the Supply of Goods | 1,284,667 | 1,829 | 1,698,518 | 2,442 | ||||
Guarantee in Legal and Administrative Proceedings of Fiscal Nature | 11,736,499 | 233,552 | 11,823,964 | 243,235 | ||||
Other Guarantees | 2,304,720 | 1,310 | 2,748,497 | 1,897 | ||||
Other Bank Guarantees | 20,316,343 | 43,442 | 19,525,773 | 36,489 | ||||
Other Financial Guarantees | 366,004 | 4,802 | 88,388 | 7,960 | ||||
Total | 47,204,564 | 314,445 | 48,926,070 | 324,727 |
Changes in Allowances for Financial Guarantees
Bank/Consolidated | ||||||||
01/01 to | 01/01 to | |||||||
Balance at Beginning | 324,728 | 255,179 | ||||||
Constitution | 7,079 | 74,719 | ||||||
Reversal (1) | (17,362) | (5,831) | ||||||
Balance at End | 314,445 | 324,067 |
(1) Corresponds to guarantees honored, change of rating or provision constituted in the line of Provision for Expected Losses Associated with Credit Risk.
20. Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security
a) Contingent Assets
In the Bank and in the Consolidated, on June 30, 2022 and December 31, 2021, no contingent assets were recognized.
b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature
Bank | Consolidated | |||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||
Reserve for Tax Contingencies and Legal Obligations (Note 19) | 4,579,072 | 4,312,234 | 7,078,921 | 6,748,684 | ||||
Accrual for Legal and Administrative Proceedings - Labor and Civil (Note 19) | 4,898,609 | 5,033,675 | 5,205,377 | 5,325,716 | ||||
Labor | 1,949,002 | 1,941,169 | 2,097,138 | 2,084,247 | ||||
Civil | 2,949,607 | 3,092,507 | 3,108,240 | 3,241,469 | ||||
Total | 9,477,681 | 9,345,909 | 12,284,299 | 12,074,400 |
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 | 4,312,234 | 1,941,169 | 3,092,507 | 4,249,744 | 2,656,098 | 3,265,784 | ||||||
Recognition Net of Reversal (1) | 182,372 | 495,067 | 2,102 | 27,039 | 477,174 | 178,478 | ||||||
Inflation Adjustment | 107,562 | 70,222 | 213,827 | 35,817 | 40,022 | 180,875 | ||||||
Write-offs Due to Payment | (23,095) | (557,456) | (358,829) | (119,108) | (768,208) | (765,207) | ||||||
Balance at End | 4,579,072 | 1,949,002 | 2,949,607 | 4,193,493 | 2,405,086 | 2,859,929 | ||||||
Escrow Deposits - Other Receivables | 1,413,949 | 699,064 | 528,281 | 1,306,277 | 714,829 | 696,150 | ||||||
Escrow Deposits - Securities | 2,789 | 4,038 | 769 | 5,246 | 3,218 | 770 | ||||||
Total Escrow Deposits (2) | 1,416,739 | 703,102 | 529,050 | 1,311,523 | 718,047 | 696,920 | ||||||
Consolidated | ||||||||||||
01/01 to | 01/01 to | |||||||||||
Tax | Labor | Civil | Tax | Labor | Civil | |||||||
Balance at Beginning | 6,748,684 | 2,084,247 | 3,241,469 | 6,707,293 | 2,900,835 | 3,441,445 | ||||||
Recognition Net of Reversal (1) | 196,666 | 542,090 | 143,072 | 35,084 | 482,040 | 231,111 | ||||||
Inflation Adjustment | 175,519 | 71,223 | 215,584 | 52,967 | 44,854 | 183,683 | ||||||
Write-offs Due to Payment | (41,947) | (600,422) | (491,885) | (134,812) | (851,800) | (847,264) | ||||||
Balance at End | 7,078,921 | 2,097,138 | 3,108,240 | 6,660,532 | 2,575,929 | 3,008,974 | ||||||
Escrow Deposits - Other Receivables | 2,707,795 | 745,026 | 536,955 | 2,589,388 | 769,824 | 708,063 | ||||||
Escrow Deposits - Securities | 3,853 | 4,038 | 769 | 6,192 | 3,218 | 770 | ||||||
Total Escrow Deposits (2) | 2,711,648 | 749,064 | 537,723 | 2,595,580 | 773,043 | 708,833 |
(1) Tax risks include the constitution of provisions for taxes related to legal and administrative proceedings and legal obligations, recorded in other operating income and other operating expenses and IR and CSLL.
(2) Refer to escrow deposit amounts, limited to the amount of the provision and do not include escrow deposits related to possible and/or remote contingencies and appeal deposits.
d) Tax and Social Security, Labor and Civil Provisions
Banco Santander and its subsidiaries are parties to legal and administrative proceedings of a tax, social security, labor and civil nature, arising from the normal course of their activities.
Provisions were set up based on the nature, complexity and history of the actions and on the assessment of loss of the companies' shares based on the opinions of internal and external legal advisors. Banco Santander has a policy of fully provisioning the value at risk of actions whose assessment is probable loss. Legal obligations of a tax and social security nature are fully recognized in the financial statements.
Management understands that the provisions made are sufficient to meet legal obligations and any losses arising from legal and administrative proceedings as follows:
d.1) 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$ 2,026,374 in the Bank and R$ 4,201,226 in the Consolidated (12/31/2021 - R$ 1,973,373 in the Bank and R$ 4,090,025 in the Consolidated): Banco Santander and the subsidiaries filed legal measures to avoid the application of the Law No. 9,718/1998, which modified the PIS and COFINS calculation basis so that they were levied on all revenues of legal entities and not only on those arising from the provision of services and sale of goods. Regarding the Banco Santander lawsuit, on April 23, 2015, a decision was published by the Federal Supreme Court (STF) admitting the Extraordinary Appeal filed by the Federal Government regarding PIS and denying the follow-up to the Extraordinary Appeal of the Federal Public Ministry regarding COFINS. Both appealed against this decision, without any success, so that the claim referring to COFINS is defined, prevailing the judgment of the Federal Regional Court of the 4th Region of August 2007, favorable to Banco Santander. The payment of the PIS of Banco Santander, as well as the enforceability of the PIS and COFINS of the other subsidiaries, are still pending final judgment by the STF.
Main legal and administrative proceedings with probable risk of loss
Banco Santander and its subsidiaries are parties to legal and administrative proceedings related to tax and social security disputes, which are classified, based on the opinion of legal advisors, as a probable risk of loss.
Provisional Contribution on Financial Transactions (CPMF) in Customer Operations- R$ 975,412 (12/31/2021 - R$945,715) in the Bank and Consolidated: in May 2003, the Brazilian Federal Revenue Service issued a tax assessment notice against Santander Distribuidora de Títulos e Valores Mobiliários Ltda. (Santander DTVM) and another auto in Banco Santander (Brasil) S.A. The subject of the case was the collection of CPMF on operations carried out by Santander DTVM in the management of its customers' funds and clearing services provided by the Bank to Santander DTVM, which took place during the years 2000, 2001 and 2002. unfavorable for both Companies. On July 3, 2015, Banco and Santander Brasil Tecnologia S.A. (current name of Produban Serviços de Informática S.A. and Santander DTVM) filed a lawsuit seeking to cancel both tax debts. The aforementioned action had the judgment and ruling unfounded, which gave rise to the filing of a Special Appeal to the STJ and an Extraordinary Appeal to the STF, which are awaiting judgment. Based on the assessment of the legal advisors, a provision was set up to cover the loss considered probable in the lawsuit.
National Institute of Social Security (INSS) - R$ 129,827 in the Bank and R$ 135,006 in the Consolidated (12/31/2021 - R$53,936 in the Bank and R$53,936 in the Consolidated): Banco Santander and its subsidiaries are administratively and judicially discussing the collection of the social security contribution and education allowance on various funds that, according to the assessment of the legal advisors, do not have a salary nature.
Tax on Services (ISS) - Financial Institutions - R$ 277,139 in the Bank and R$ 306,407 in the Consolidated (12/31/2021 - R$256,770 in the Bank and R$283,528 in the Consolidated): Banco Santander and its subsidiaries are administratively and judicially discussing the requirement, by several municipalities, of the payment of ISS on several revenues arising from operations that are not usually classified as provision of services. In addition, other lawsuits involving ISS, classified as a possible risk of loss, are described in note 20.e.
d.2) Legal and Administrative Lawsuits of a Labor Nature
These are lawsuits filed by Unions, Associations, the Public Ministry of Labor and former employees claiming labor rights they deem to be due, in particular the payment of “overtime” and other labor rights, including lawsuits related to retirement benefits.
For lawsuits considered common and similar in nature, provisions are recorded based on the historical average of closed proceedings. Claims that do not meet the above criteria are provisioned based on an individual assessment carried out, and the provisions are set up based on the probable risk of loss, in the law and in case law, in accordance with the assessment of loss carried out by the legal advisors.
Former employees of Banespa. Action distributed in 1998 by the Association of Retired Persons of Banespa (AFABESP) requesting the payment of a semiannual bonus provided for in the regulations of Banco Banespa for approximately 8,400 former employees (retirees), according to which the payment will be made in the event that the Bank makes a profit and the distribution of this profit is approved by the board of directors. The bonus was not paid in 1994 and 1995 because Banespa bank did not make a profit during these years. Partial payments were made between 1996 and 2000 as approved by the board of directors. Said clause was excluded from the regulation in 2001. The Regional Labor Court and the Superior Labor Court ordered Santander Brasil, as successor to Banespa, to pay the semiannual bonus for the periods relating to the second semester of 1996 and the semesters of 1997. On March 20, 2019, a decision of the Federal Supreme Court (Supreme Federal Court, or “STF”) rejected the extraordinary appeal filed by Banco Santander, which did not resolve the merits of the case. We filed a rescission action to annul the sentence due to the lack of legitimacy of AFABESP (second precedent No. 573.232 of the STF) or to recognize the nullity of the TRT judgment that did not notify Banco Santander about the modifying effects of the decision, as well as to suspend the execution in the main process. The rescission action was dismissed, and this decision was filed a motion for clarification, due to the absence of an explicit statement about the arguments brought by the Bank. Regarding the Motions for Clarification, the points of omission were not answered as required by law, which is why an Extraordinary Appeal was filed, which was denied by the TST. From this decision, the Bank filed an interlocutory appeal, which is pending admissibility, considering that the decisions rendered by the Superior Labor Court contradict the already peaceful position in the STF (precedent No. 573,232), according to which the Association needs a specific power of attorney to sue in judgment, and also the decision affronts constitutional precepts about access to justice (item XXXV of art. 5 of the CF) by determining excessive collection of costs. In relation to the main action, in August 2021, a decision was rendered that determined that the execution be carried out individually in the court corresponding to each defendant and AFABESP filed an appeal, however, so far there has been no decision in this regard.
Our legal advisors classified the risk of loss as probable. The current decisions of the court, and neither of the court in the main proceedings, do not define a specific amount to be paid by the substituted, and the amounts must be calculated in regular settlement of the sentence.
On June 30, 2022, the case is classified as probable loss and the provision was constituted based on the estimated loss
d.3) Civil Judicial and Administrative Proceedings
These provisions generally arise from: (1) lawsuits requesting revision of contractual terms and conditions or requests for monetary adjustments, including alleged effects of the implementation of various government economic plans, (2) lawsuits arising from financing contracts, (3) execution actions; and (4) damages claims. For civil actions considered common and similar in nature, provisions are recorded based on the historical average of closed proceedings. Claims that do not meet the above criteria are provisioned based on an individual assessment carried out, and the provisions are set up based on the probable risk of loss, in the law and in case law, in accordance with the assessment of loss carried out by the legal advisors.
The main lawsuits classified as risk of probable loss are described below:
Indemnity Actions - These refer to compensation for material and/or moral damage, relating to the consumer relationship, dealing mainly with issues relating to credit cards, direct consumer credit, checking accounts, collection and loans and other matters. In the actions related to causes considered similar and usual for the business, in the normal course of the Bank's activities, the provision is constituted based on the historical average of closed processes. Claims that do not meet the above criteria are provisioned based on an individual assessment carried out, and the provisions are set up based on the probable risk of loss, in the law and in case law, in accordance with the assessment of loss carried out by the legal advisors.
Economic Plans - Refer to legal disputes, claiming alleged inflationary purges arising from Economic Plans (Bresser, Verão, Collor I and II), as they understand that such plans violated acquired rights related to the application of inflation indices supposedly due to Savings Accounts, Judicial Deposits and Time Deposits (CDBs). The lawsuits are provisioned based on the individualized assessment of loss carried out by the legal advisors.
Banco Santander is also party to public civil actions, on the same matter, filed by consumer protection entities, the Public Ministry or Public Defenders. The constitution of a provision is made only for cases with probable risk, based on requests for individual executions. The issue is still under review at the STF. There is jurisprudence in the STF favorable to Banks regarding economic phenomenon similar to that of savings, as in the case of correction of time deposits (CDBs) and corrections applied to contracts (table).
However, the jurisprudence of the STF has not yet been consolidated on the constitutionality of the norms that modified the monetary standard in Brazil. On April 14, 2010, the Supreme Court of Justice (STJ) ruled that the deadline for bringing public civil actions discussing the purges is 5 years from the date of the plans, but this decision has not yet become final. Thus, with this decision, a large part of the actions, as they were proposed after a period of 5 years, will probably be dismissed, reducing the amounts involved. The STJ also decided that the period for individual savers to qualify for Public Civil Actions is also 5 years, counted from the final and unappealable decision of the respective sentence. Banco Santander believes in the success of the theses defended before these courts for their content and foundation.
At the end of 2017, the Federal General Counsel (AGU), Bacen, the Consumer Defense Institute (Idec), the Brazilian Savings Front (Febrapo) and the Brazilian Federation of Banks (Febraban) signed an agreement that seeks to end the legal disputes over the Economic Plans.
Discussions focused on defining the amount that would be paid to each author, according to the balance in the passbook on the date of the plan. The total value of the payments will depend on the number of subscriptions, and also on the number of savers who have proven in court the existence of the account and the balance on the anniversary date of the change in the indices. The term of agreement negotiated between the parties was approved by the STF.
In a decision handed down by the STF, there was a national suspension of all processes that deal with the issue for the period of validity of the agreement, with the exception of cases in which the sentence was definitively complied with.
On March 11, 2020, the agreement was extended through an amendment, with the inclusion of actions that only involve the discussion of the Collor I Plan. This extension has a term of 5 years and the ratification of the terms of the amendment took place on 03 of June 2020.
Management considers that the provisions made are sufficient to cover the risks involved with the economic plans, considering the approved agreement.
e) Tax and Social Security, Labor and Civil Contingent Liabilities Classified as Risk of Possible Loss
These are legal and administrative proceedings of a tax, social security, labor and civil nature classified, based on the opinion of legal advisors, as a possible risk of loss, and therefore not provisioned.
Tax lawsuits classified as possible losses totaled R$ 30,635 million (12/31/2021 - R$ 29.726 million) in the Consolidated, with the main lawsuits being as follows:
INSS on Profit Sharing (PLR) - the Bank and the subsidiaries are involved in legal and administrative proceedings arising from questioning by the tax authorities, regarding the collection of social security contribution on payments made as profit sharing. As of June 30, 2022, the amount was approximately R$ 7,552 million.
Tax on Services (ISS) - Financial Institutions -Banco Santander and its subsidiaries are administratively and judicially discussing the requirement, by several municipalities, of payment of ISS on various income arising from operations that are not usually classified as provision of services. As of June 30, 2022, the amount was approximately R$ 4,623 million.
Non-Approved Compensation - the Bank and its affiliates are discussing administratively and judicially with the Federal Revenue Service the non-approval of tax offsets with credits arising from overpayments or undue payments. As of June 30, 2022, the amount was approximately R$ 5,502 million.
Amortization of Banco Real's Goodwill - the Brazilian Federal Revenue Service issued a tax assessment notice against the Bank to demand payments of IRPJ and CSLL, including late payment charges, referring to the base period of 2009. The Tax Authorities considered that the goodwill related to the acquisition of Banco Real, amortized in the accounting prior to its incorporation, could not be deducted by Banco Santander for tax purposes. The tax assessment notice was duly challenged and we are currently awaiting judgment before CARF. As of June 30, 2022, the amount was approximately R$ 1,503 million.
Losses on Credit Operations - the Bank and the subsidiaries contested the tax assessments issued by the Federal Revenue Service of Brazil, alleging the improper deduction of losses on credit operations from the IRPJ and CSLL calculation bases for allegedly not meeting the requirements of applicable laws. As of June 30, 2022, the amount was approximately R$ 1,679 million.
Use of CSLL Tax Loss and Negative Basis – Tax assessment notices issued by the Brazilian Federal Revenue Service in 2009 for alleged undue offsetting of tax losses and negative basis of CSLL, as a result of tax assessments issued in previous periods. Judgment at the administrative level is awaited. As of June 30, 2022, the amount was approximately R$ 1,121 million.
Amortization of Banco Sudameris Goodwill - the tax authorities issued tax assessment notices to demand the payments of IRPJ and CSLL, including late payment charges, referring to the tax deduction of the amortization of the goodwill paid in the acquisition of Banco Sudameris, referring to the base period from 2007 to 2012. Banco Santander presented the respective administrative defenses, which were judged unfavorably. Currently, the lawsuits are awaiting judgment at CARF. As of June 30, 2022, the amount was approximately R$ 677 million.
IRPJ and CSLL - Capital Gain - the Brazilian Internal Revenue Service issued a tax assessment notice against Santander Seguros (legal successor of ABN AMRO Brasil Dois Participações S.A. (AAB Dois Par) charging income tax and social contribution related to the 2005 fiscal year. alleges that the capital gain on the sale of shares of Real Seguros S.A. and Real Vida e Previdência S.A by AAB Dois Par should be taxed at a rate of 34.0% instead of 15.0%. based on the understanding that the tax treatment adopted in the transaction was in compliance with current tax legislation and the capital gain was duly taxed. The administrative proceeding ended unfavorably to the Company. In July 2020, the Company filed a lawsuit seeking to cancel the debt. lawsuit awaits judgment. Banco Santander is responsible for any adverse outcome in this proceeding as the former parent of Zurich Santander Brasil Seguros and Pension S.A. As of June 30, 2022, the amount was approximately R$ 508 million.
Labor claims classified as possible loss totaled R$ 196 million in the Consolidated, excluding the lawsuit below:
Readjustment of the Pension Supplements of Banesprev by the IGPDI– lawsuit filed in 2002 in the Federal Court by the Association of Retired Employees of the Bank of the State of São Paulo requesting the readjustment of the retirement supplement by the IGPDI for Banespa retirees who were admitted until May 22, 1975. The sentence granted the correction, but only in periods in which no other form of readjustment was applied. The Bank and Banesprev appealed this decision and the Appeals are still pending judgment. In Provisional Execution, calculations were presented by the Bank and Banesprev due to the exclusion of participants who, among other reasons, appear as plaintiffs in other actions or have already had some type of readjustment. The amount involved is not disclosed, considering that there is no list of representatives duly approved in the case file.
Liabilities related to civil lawsuits with a possible risk of loss totaled R$2,420 million in the Consolidated, with the main proceedings:
Indemnification Action Coming from Banco Bandepe - related to the loan agreement. After the appeal filed by the Bank with the Superior Court of Justice was granted, the party began a new settlement of the judgment.
Indemnity Action Regarding Custody Services - provided by Banco Santander in the initial phase and still without a sentence. Other Legal Actions for the Liability of Former Controllers.
f) Other Legal Actions for the Responsibility of Former Controllers
Refers to tax, labor and civil lawsuits, in the amounts of R$ 0, R$ 0 and R$ 496 (12/31/2021 – R$0, R$0 and R$496) in the Bank and Consolidated, respectively, recorded in other liabilities (Note 19) of responsibility of former controlling shareholders of acquired banks and companies. Based on the agreements signed, these lawsuits have guarantees of full reimbursement by the former controlling shareholders, whose respective rights were recorded in other assets (Note 12).
a) Capital
According to the Bylaws, Banco Santander's capital stock may be increased up to the limit of the authorized capital, regardless of statutory amendment, upon 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 legal limits established for the number of preferred shares. Any capital increase that exceeds this limit will require shareholder approval.
At the Extraordinary General Meeting held on March 31, 2021, it was approved in the context of the partial spin-off of Santander Brasil, which resulted in the segregation of the shares owned by it issued by Getnet Adquirência e Serviços para Meios de Pagamentos S.A. (“Getnet”), with the transfer of the spun-off portion to Getnet, the reduction of the capital stock of Santander Brasil in the total amount of 2,000,000 (two billion reais), without the cancellation of shares, increasing the share capital of Santander Brasil from 57,000,000 (fifty-seven billion reais) to 55,000,000 (fifty-five billion reais).
The share capital, fully subscribed and paid-in, is divided into registered, book-entry shares, with no par value.
Thousands of Shares | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Common | Preferred | Total | Common | Preferred | Total | |||||||
Brazilian Residents | 111,597 | 137,252 | 248,849 | 109,718 | 135,345 | 245,063 | ||||||
Foreign Residents | 3,707,098 | 3,542,584 | 7,249,682 | 3,708,977 | 3,544,491 | 7,253,468 | ||||||
Total | 3,818,695 | 3,679,836 | 7,498,531 | 3,818,695 | 3,679,836 | 7,498,531 | ||||||
(-) Treasury Shares | (27,776) | (27,776) | (55,552) | (15,755) | (15,755) | (31,510) | ||||||
Total Outstanding | 3,790,919 | 3,652,060 | 7,442,979 | 3,802,940 | 3,664,081 | 7,467,021 |
b) Dividends and Interest on Capital
By-laws, shareholders are guaranteed a minimum dividend of 25% of net income for each year, adjusted in accordance with legislation. Preferred shares do not have voting rights and cannot be converted into common shares, but they have the same rights and advantages granted to common shares, in addition to priority in the distribution of dividends and an additional 10% on dividends paid to common shares, and in the reimbursement of capital, without premium, in case of dissolution of the Bank.
Dividends were calculated and paid in accordance with the Brazilian Corporate Law.
Before the Annual Shareholders' Meeting, the Board of Directors may decide on the declaration and payment of dividends on the profits earned, based on: (i) balance sheets or profit reserves existing in the last balance sheet or (ii) balance sheets issued in periods of less than six months, provided that the total dividends paid in each semester of the fiscal year does not exceed the amount of capital reserves. These dividends are fully imputed to the mandatory dividend.
We present the distribution of Dividends and Interest on Equity made on June 30, 2022 and December 31, 2021.
06/30/2022 | ||||||||||||||
In Thousands | Brazilian Real per Thousand Shares/Units | |||||||||||||
of Brazilian Real | Gross | Net | ||||||||||||
Common | Preferred | Unit | Common | Preferred | Unit | |||||||||
Dividends (1)(3) | 1,300,000 | 165.95 | 182.55 | 348.50 | 165.95 | 182.55 | 348.50 | |||||||
Interest on Capital (1)(4) | 1,700,000 | 217.02 | 238.72 | 455.73 | 184.46 | 202.91 | 387.37 | |||||||
Dividends (2)(4) | 700,000 | 89.45 | 98.40 | 187.85 | 89.45 | 98.40 | 187.85 | |||||||
Interest on Capital (2)(4) | 1,000,000 | 127.79 | 140.57 | 268.36 | 108.62 | 119.48 | 228.10 | |||||||
Total | 4,700,000 |
(1) Deliberated by the Board of Directors on February 1, 2022, paid on March 4, 2022, without any monetary restatement.
(2) Deliberated by the Board of Directors on April 14, 2022, paid on May 16, 2022, without any monetary restatement.
(3) They were fully allocated to the mandatory minimum dividends to be distributed by the Bank for the year 2021.
(4) They were fully allocated to the mandatory minimum dividends to be distributed by the Bank for the year 2022.
12/31/2021 | ||||||||||||||
In Thousands | Brazilian Real per Thousand Shares/Units | |||||||||||||
of Brazilian Real | Gross | Net | ||||||||||||
Common | Preferred | Unit | Common | Preferred | Unit | |||||||||
Dividends (1)(5) | 3,000,000 | 382.98 | 421.28 | 804.26 | 382.98 | 421.28 | 804.26 | |||||||
Interest on Capital (2)(5) | 3,400,000 | 434.04 | 477.45 | 911.49 | 368.94 | 405.83 | 774.77 | |||||||
Dividends (3)(5) | 3,000,000 | 382.98 | 421.28 | 804.26 | 382.98 | 421.28 | 804.26 | |||||||
Interest on Capital (4)(5) | 249,000 | 31.79 | 34.97 | 66.75 | 27.02 | 29.72 | 56.74 | |||||||
Total | 9,649,000 |
|
(1) Deliberated by the Board of Directors on April 27, 2021, paid on June 22, 2021, without any monetary restatement.
(2) Deliberated by the Board of Directors on July 27, 2021, paid on September 03, 2021, without any monetary restatement.
(3) Deliberated by the Board of Directors on October 26, 2021, paid on December 3, 2021, without any monetary restatement.
(4) Deliberated by the Board of Directors on December 28, 2021, paid on February 3, 2022, without any monetary restatement.
c) Reservations
The net income calculated, after deductions and legal provisions, will have the following destination:
Legal reserve
According to the Brazilian corporate law, 5% for the constitution of the legal reserve, until it reaches 20% of the capital. This reserve is intended to ensure the integrity of the capital stock and can only be used to offset losses or increase capital.
Capital reserves
The Bank's capital reserves are composed of: share premium reserve and other capital reserves, and can only be used to absorb losses that exceed retained earnings and profit reserves; redemption, reimbursement or acquisition of our own shares; incorporation to the share capital; or payment of dividends to preferred shares under certain circumstances.
Dividend Equalization Reserve
After the allocation of dividends, the balance, if any, may, upon proposal of the Executive Board and approved by the Board of Directors, be allocated to the formation of a reserve for equalization of dividends, which will be limited to 50% of the capital stock. This reserve is intended to guarantee funds for the payment of dividends, including in the form of interest on equity, or its advances, in order to maintain the flow of remuneration to shareholders.
d) Treasury Shares
At a meeting held on February 2, 2021, the Board of Directors approved, in continuity with the buyback program that expired on November 4, 2020, a new buyback program for Units and ADRs issued by Banco Santander, directly or through its branch in Cayman, for maintenance in treasury or subsequent sale.
The Buyback Program encompasses the acquisition of up to 36,956,402 Units, representing 36,956,402 common shares and 36,956,402 preferred shares, which corresponded, on December 31, 2020, to approximately 1% of the Bank's capital stock. As of December 31, 2020, Banco Santander had 355,661,814 common shares and 383,466,228 preferred shares outstanding.
The repurchase is aimed at (1) maximizing the generation of value for shareholders through efficient management of the capital structure; and (2) enable the payment of administrators, management-level employees and other employees of the Bank and companies under its control, under the terms of the Long-Term Incentive Plans. The term of the Buyback Program is up to 18 months from February 3, 2021, ending on August 2, 2022.
Bank/Consolidated | ||||
Shares in Thousands | ||||
06/30/2022 | 12/31/2021 | |||
Quantity | Quantity | |||
Units | Units | |||
Treasury Shares at Beginning of the Period | 15,755 | 18,829 | ||
Shares Acquisitions | 16,609 | 91 | ||
Payment - Share-Based Compensation | (4,588) | (3,165) | ||
Treasury Shares at Beginning of the Period | 27,776 | 15,755 | ||
Subtotal - Treasury Shares in Thousands of Reais | R$1,121,292 | R$711,268 | ||
Issuance Cost in Thousands of Reais | R$1,771 | R$1,771 | ||
Balance of Treasury Shares in Thousands of Reais | R$1,123,063 | R$713,039 | ||
Cost/Share Price | Units | Units | ||
Minimum Cost (*) | R$7.55 | R$7.55 | ||
Weighted Average Cost (*) | $27.69 | R$33.86 | ||
Maximum Cost (*) | R$49.55 | R$49.55 | ||
Share Price | R$28.81 | R$29.98 |
(*) Considering since the beginning of operations on the stock exchange.
e) Minority Interest
Stockholders’ Equity | Non Controlling Interest | |||||||||
06/30/2022 | 12/31/2021 | 01/01 to | 01/01 to | |||||||
Banco RCI Brasil S.A. | 933,157 | 916,393 | 33,841 | 54,222 | ||||||
Banco Hyundai Capital Brasil S.A. | 204,361 | 177,880 | 26,330 | 9,287 | ||||||
Banco PSA | 132,773 | 129,975 | 3,018 | 5,986 | ||||||
Rojo Entretenimento S.A. | 7,119 | 6,939 | 180 | (142) | ||||||
GIRA | 7,085 | 3,109 | 3,976 | (272) | ||||||
Toro CTVM | 94,007 | 22,948 | 31,392 | (1,164) | ||||||
Toro Investimentos | 14,436 | - | 586 | - | ||||||
Solution 4Fleet | 2,319 | - | (356) | - | ||||||
APE11 | 3,670 | - | (251) | - | ||||||
Total | 1,398,928 | 1,257,244 | 98,716 | 67,918 |
|
a) Remuneration of Key Management Personnel
The Bank's Board of Directors' Meeting held on March 25, 2022 approved, in accordance with the favorable recommendation of the Remuneration Committee, the proposal for the maximum global remuneration for Managers (Board of Directors and Executive Board) for the year 2022, in the amount of up to R$504,550 (four hundred and thirty-three million, nine hundred and forty thousand reais), covering fixed, variable and share-based compensation and other benefits. The proposal was subject to deliberation at the Annual General Meeting (AGO) held on April 29, 2022.
a.1) Long Term Benefits
The Bank, like Banco Santander Spain, as well as other subsidiaries around the world of Grupo Santander, has long-term remuneration programs linked to the performance of the market price of its shares, based on the achievement of targets.
a.2) Short Term Benefits
The table below shows the salaries and fees of the Board of Directors and Executive Board and refers to the amount recognized as an expense in the periods ended June 30, 2022 and 2021, by Banco Santander and its subsidiaries to its Directors for the positions they hold at Banco Santander and other companies of the Santander Conglomerate.
The amounts related to the Variable and Share-Based Compensation will be paid in subsequent periods.
01/01 to | 01/01 to | |||||
Fixed Compensation | 59,079 | 44,849 | ||||
Variable Compensation - in cash | 86,544 | 55,126 | ||||
Variable Compensation - in shares | 70,828 | 54,525 | ||||
Others | 24,330 | 24,764 | ||||
Total Short-Term Benefits | 240,781 | 179,264 | ||||
Variable Compensation - in cash | 82,643 | 70,962 | ||||
Variable Compensation - in shares | 87,468 | 73,444 | ||||
Total Long-Term Benefits | 170,111 | 144,406 | ||||
Total | 410,892 | 323,670 |
Additionally, in 2022, charges were paid on Management compensation in the amount of R$18,922 (2021 - R$15,187).
b) Termination of the Agreement
The termination of the employment relationship with the Administrators, in the event of non-compliance with obligations or by the contractor's own will, does not entitle the holder to any financial compensation and the benefits acquired will be discontinued.
c) Credit Operations
The Bank and its subsidiaries may carry out transactions with related parties, in line with current legislation regarding articles 6 and 7 of CMN Resolution No. 4,693/18, article 34 of the "Law of Corporations" and the Policy for Transactions with Parties Santander Related, published on the Investor Relations website, being considered as related parties:
(1) its controllers, natural or legal persons, pursuant to art. 116 of the Corporations Law;
(2) its officers and members of statutory or contractual bodies;
(3) in relation to the persons mentioned in items (i) and (ii), their spouse, partner and relatives, consanguineous or related, up to the second degree;
(4) natural persons with a qualified equity interest in its capital;
(5) legal entities with a qualified equity interest in its capital;
(6) legal entities in whose capital, directly or indirectly, a Santander Financial Institution holds a qualified shareholding;
(7) legal entities in which a Santander Financial Institution has effective operational control or preponderance in resolutions, regardless of ownership interest; and
(8) 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 | ||||||||||||
06/30/2022 | ||||||||||||
Stockholders | Common Shares | Common Shares (%) | Preferred Shares | Preferred Shares (%) | Total Shares | Total Shares (%) | ||||||
Sterrebeeck B.V. (1) | 1,809,583 | 47.4% | 1,733,644 | 47.1% | 3,543,227 | 47.3% | ||||||
Grupo Empresarial Santander, S.L. (GES) (1) | 1,627,891 | 42.6% | 1,539,863 | 41.9% | 3,167,754 | 42.2% | ||||||
Banco Santander, S.A. (1) | 2,696 | 0.1% | - | 0.00% | 2,696 | 0.00% | ||||||
Directors (*) | 4,786 | 0.1% | 4,786 | 0.1% | 9,572 | 0.1% | ||||||
Others | 345,963 | 9.1% | 373,767 | 10.1% | 719,730 | 9.7% | ||||||
Total Outstanding | 3,790,919 | 99.3% | 3,652,060 | 99.2% | 7,442,979 | 99.3% | ||||||
Treasury Shares | 27,776 | 0.7% | 27,776 | 0.8% | 55,552 | 0.7% | ||||||
Total | 3,818,695 | 100.0% | 3,679,836 | 100.0% | 7,498,531 | 100.0% | ||||||
Free Float (2) | 345,962 | 9.1% | 373,766 | 10.2% | 719,728 | 9.6% | ||||||
| ||||||||||||
Shares in Thousands | ||||||||||||
12/31/2021 | ||||||||||||
Stockholders | Common Shares | Common Shares (%) | Preferred Shares | Preferred Shares (%) | Total Shares | Total Shares (%) | ||||||
Sterrebeeck B.V. (1) | 1,809,583 | 47.4% | 1,733,644 | 47.1% | 3,543,227 | 47.3% | ||||||
GES (1) | 1,627,891 | 42.6% | 1,539,863 | 41.9% | 3,167,754 | 42.2% | ||||||
Banco Santander, S.A. (1) | 2,696 | 0.1% | - | 0.00% | 2,696 | 0.00% | ||||||
Directors (*) | 4,939 | 0.1% | 5,029 | 0.1% | 9,968 | 0.1% | ||||||
Others | 357,831 | 9.4% | 385,545 | 10.5% | 743,374 | 9.9% | ||||||
Total Outstanding | 3,802,940 | 99.6% | 3,664,081 | 99.6% | 7,467,021 | 99.6% | ||||||
Treasury Shares | 15,755 | 0.4% | 15,755 | 0.4% | 31,510 | 0.4% | ||||||
Total | 3,818,695 | 100.0% | 3,679,836 | 100.0% | 7,498,531 | 100.0% | ||||||
Free Float (2) | 357,830 | 9.4% | 385,544 | 10.5% | 743,374 | 9.9% |
(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.
e) Related Party Transactions
Santander has a Policy for Transactions with Related Parties approved by the Board of Directors, which aims to ensure that all transactions specified in the policy are carried out in the interests of Banco Santander and its shareholders. The policy defines powers to approve certain transactions by the Board of Directors. The established rules are also applied to all employees and managers of Banco Santander and its subsidiaries.
Transactions and remuneration for services with related parties are carried out in the normal course of business and under commutativity conditions, including interest rates, terms and guarantees, and do not involve greater risks than normal collection or present other disadvantages.
Bank | ||||||||
Controllers (1) | Affiliates and shared control (2) | Key Administration Personnel (3) | Total | |||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Assets | 8,771,446 | 3,268,928 | 109,335,233 | 116,021,480 | 7 | 1 | 118,106,686 | 119,290,409 |
Availability | 892,424 | 1,479,611 | 97,123 | 8,732,257 | - | - | 989,547 | 10,211,868 |
Interbank Liquidity Applications | 6,688,926 | - | 82,554,336 | 85,460,227 | - | - | 89,243,262 | 85,460,227 |
Marketable securities | - | - | 1,193,646 | 1,277,596 | - | - | 1,193,646 | 1,277,596 |
Derivative Financial Instruments - Net | - | (511,355) | 503,203 | (2,923,940) | - | - | 503,203 | (3,435,295) |
Interfinancial Relations | - | - | 21,850,195 | 18,859,193 | - | - | 21,850,195 | 18,859,193 |
Credit operations | - | - | 1,927,637 | 3,250,610 | - | - | 1,927,637 | 3,250,610 |
Dividends and Bonuses Receivable | - | - | 8,167 | 293,413 | - | - | 8,167 | 293,413 |
Trading and Intermediation of Values | 310,922 | 531,612 | - | - | - | - | 310,922 | 531,612 |
Exchange Portfolio - Liquid | 736,530 | (159,043) | - | - | - | - | 736,530 | (159,043) |
Receivables | - | - | 974,571 | - | - | - | 974,571 | - |
Amounts Receivable from Related Companies | - | 4,516 | 48,603 | 22,552 | - | - | 48,603 | 27,068 |
Other Assets - Others | 142,644 | 1,923,587 | 177,752 | 1,049,572 | 7 | 1 | 320,403 | 2,973,160 |
Liabilities | (21,083,199) | (25,508,810) | (42,396,932) | (20,956,304) | (355,474) | (522,996) | (63,835,605) | (97,938,316) |
Deposits | (931,415) | (10,995) | (2,687,724) | (28,918,620) | (28,846) | (28,409) | (3,647,985) | (28,958,024) |
Compromised Operations | - | - | (6,425,071) | (7,262,118) | - | - | (6,425,071) | (7,262,118) |
Resources for Acceptance and Issuance of Securities | - | - | - | - | 182,945 | 128,214 | 182,945 | 128,214 |
Obligations for Loans and Onlendings | (6,826,807) | (11,167,495) | (31,347,600) | 16,038,461 | - | - | (38,174,407) | (46,079,240) |
Dividends and Bonuses Payable | - | (73) | - | (564,713) | - | 258 | - | (564,528) |
Amounts Payable from Related Companies | (103,483) | (241,640) | (1,817,261) | (128,901) | - | - | (1,920,744) | (370,541) |
Capital Eligible Debt Instruments | (13,221,494) | (14,088,607) | - | - | - | - | (13,221,494) | (14,088,607) |
Other Assets - Others | - | - | (119,276) | (120,413) | (517,825) | (639,507) | (637,101) | (759,920) |
Guarantees and Limits | - | - | - | - | 8,252 | 16,448 | 8,252 | 16,448 |
06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | |
Result | 4,973,387 | 687,951 | 1,875,349 | 1,643,760 | (363,083) | (306,571) | 6,485,653 | 2,025,141 |
Income from Financial Intermediation | 4,846,642 | 955,158 | 3,321,240 | 909,339 | 188 | 116 | 8,168,070 | 1,864,613 |
Financial Intermediation Expenses | 230,115 | (157,422) | (1,615,779) | 679,839 | (1,241) | (450) | (1,386,905) | 521,968 |
Other Operating Income (Expenses) | (103,370) | (109,785) | (181,001) | 54,582 | (362,030) | (306,237) | (646,401) | (361,440) |
Non-Operating Result | - | - | 350,889 | - | - | - | 350,889 | - |
Consolidated | ||||||||
Controllers (1) | Affiliates and shared control (2) | Key Administration Personnel (3) | Total | |||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |
Assets | 8,771,516 | 895,492 | 25,452,351 | 33,167,206 | 21,576 | 20,034 | 34,245,443 | 34,082,732 |
Availability | 892,424 | 1,479,611 | 78,714 | 8,732,257 | - | - | 971,138 | 10,211,868 |
Interbank Liquidity Applications | 6,688,926 | - | - | - | - | - | 6,688,926 | - |
Marketable securities | - | - | 848,477 | 955,737 | - | - | 848,477 | 955,737 |
Derivative Financial Instruments - Net | - | (2,884,861) | 73,028 | 107,223 | - | - | 73,028 | (2,777,638) |
Interfinancial Relations | - | - | 21,827,681 | 18,857,386 | - | - | 21,827,681 | 18,857,386 |
Credit operations | - | - | 1,549,007 | 3,528,333 | 21,569 | 20,033 | 1,570,576 | 3,548,366 |
Dividends and Bonuses Receivable | - | - | - | 21,811 | - | - | - | 21,811 |
Trading and Intermediation of Values | 310,922 | 531,612 | - | - | - | - | 310,922 | 531,612 |
Exchange Portfolio - Liquid | 736,530 | (159,043) | - | - | - | - | 736,530 | (159,043) |
Receivables | - | - | 899,782 | - | - | - | 899,782 | - |
Amounts Receivable from Related Companies | - | 4,516 | 4,801 | 1,378 | - | - | 4,801 | 5,894 |
Other Assets - Others | 142,714 | 1,923,657 | 170,861 | 963,081 | 7 | 1 | 313,582 | 2,886,739 |
Liabilities | (21,083,220) | (25,508,831) | (9,493,197) | (10,323,407) | (368,677) | (547,895) | (30,945,094) | (36,380,133) |
Deposits | (931,415) | (10,995) | (978,399) | (1,496,059) | (28,846) | (28,672) | (1,938,660) | (1,535,726) |
Compromised Operations | - | - | (2,295,885) | (1,003,908) | - | - | (2,295,885) | (1,003,908) |
Resources for Acceptance and Issuance of Securities | - | - | - | - | 182,945 | 128,593 | 182,945 | 128,593 |
Obligations for Loans and Onlendings | (6,826,807) | (11,167,495) | (6,024,445) | (7,079,955) | - | - | (12,851,252) | (18,247,450) |
Dividends and Bonuses Payable | - | (73) | - | (564,713) | - | - | - | (564,786) |
Amounts Payable from Related Companies | (103,504) | (241,661) | (44,951) | (31,280) | - | - | (148,455) | (272,941) |
Capital Eligible Debt Instruments | (13,221,494) | (14,088,607) | - | - | - | - | (13,221,494) | (14,088,607) |
Other Liabilities - Others | - | - | (149,517) | (147,492) | (531,028) | (664,264) | (680,545) | (811,756) |
Guarantees and Limits | - | - | - | - | 8,252 | 16,448 | 8,252 | 16,448 |
06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | 06/30/2022 | 06/30/2021 | |
Result | 4,973,387 | 687,951 | 1,070,501 | 430,242 | (413,038) | (324,016) | 5,630,850 | 794,177 |
Income from Financial Intermediation | 4,846,642 | 955,158 | 418,552 | 155,789 | 188 | 116 | 5,265,382 | 1,111,063 |
Financial Intermediation Expenses | 230,115 | (157,422) | (187,481) | (39,920) | (1,241) | (450) | 41,393 | (197,792) |
Other Operating Income (Expenses) | (103,370) | (109,785) | 488,541 | 314,373 | (411,985) | (323,682) | (26,814) | (119,094) |
Non-Operating Result | - | - | 350,889 | - | - | - | 350,889 | - |
(1) Parent company - Banco Santander is indirectly controlled by Banco Santander Spain (Note 1), through the subsidiaries GES and Sterrebeeck B.V.
(2) Companies listed in note 14.
(3) Refers to the recording in memorandum accounts of Guarantees and Limits of credit operations with Key Management Personnel.
23. Income from Services Rendered and Banking Fees
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Asset Management | 312,272 | 384,305 | 655,557 | 672,441 |
Checking Account Services | 1,925,756 | 1,924,138 | 1,930,547 | 1,924,846 |
Lending Operations and Income from Guarantees Provided | 542,935 | 564,930 | 702,223 | 750,926 |
Lending Operations | 248,385 | 231,324 | 407,583 | 417,320 |
Income Guarantees Provided | 294,550 | 333,606 | 294,640 | 333,606 |
Insurance Fees | 902,821 | 946,972 | 1,573,189 | 1,663,113 |
Cards (Debit and Credit) and Acquiring Services | 2,631,996 | 2,161,337 | 2,730,674 | 2,635,031 |
Collection | 704,680 | 748,086 | 718,704 | 743,195 |
Brokerage, Custody and Placement of Securities | 613,879 | 562,510 | 769,613 | 718,956 |
Others | 128,005 | 188,814 | 418,599 | 443,216 |
Total | 7,762,344 | 7,481,091 | 9,499,106 | 9,551,724 |
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Compensation | 1,910,919 | 1,699,140 | 2,228,729 | 1,958,920 |
Charges | 604,377 | 660,449 | 749,695 | 767,764 |
Benefits | 591,128 | 594,143 | 791,426 | 706,617 |
Training | 25,906 | 19,452 | 28,750 | 22,268 |
Others | 1,576 | 375 | 45,163 | 30,207 |
Total | 3,133,906 | 2,973,558 | 3,843,763 | 3,485,775 |
25. Other Administrative Expenses
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Depreciation and Amortization | 1,383,415 | 2,289,078 | 1,474,746 | 2,413,988 |
Outsourced and Specialized Services | 1,163,206 | 1,071,342 | 1,150,924 | 1,268,193 |
Communications | 168,583 | 175,420 | 183,289 | 182,066 |
Data Processing | 1,514,400 | 1,438,358 | 1,392,412 | 1,287,645 |
Advertising, Promotions and Publicity | 186,063 | 200,960 | 264,908 | 257,753 |
Rentals | 442,375 | 395,144 | 448,062 | 398,205 |
Transportation and Travel | 60,043 | 37,150 | 85,172 | 47,735 |
Financial System Services | 135,201 | 150,257 | 164,647 | 186,616 |
Security and Money Transport | 270,330 | 273,072 | 272,693 | 274,175 |
Asset Maintenance and Upkeep | 144,682 | 145,014 | 159,276 | 156,867 |
Water, Electricity and Gas | 115,021 | 95,207 | 119,416 | 97,321 |
Materials | 66,517 | 34,028 | 75,491 | 40,558 |
Others | 528,859 | 410,344 | 457,735 | 433,956 |
Total | 6,178,695 | 6,715,375 | 6,248,771 | 7,045,077 |
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Net Income Pension and Capitalization | - | - | 308,017 | 272,384 |
Monetary Adjustment of Escrow Deposits | 244,928 | 89,156 | 301,314 | 106,148 |
Recoverable Taxes | 180,217 | 147,406 | 276,717 | 155,573 |
Recovery of Charges and Expenses | 873,484 | 590,416 | 853,620 | 434,677 |
Active Monetary Variation | - | - | 215 | - |
Others (1) | 2,024,934 | 676,867 | 4,251,135 | 1,689,020 |
Total | 3,323,563 | 1,503,845 | 5,991,018 | 2,657,802 |
(1) In the semesters ended June 30, 2022 and 2021, mainly includes reversals of provisions and gains from energy sales
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Operating Provisions | ||||
Fiscal (Note 20.c) | 182,372 | 27,039 | 196,666 | 35,084 |
Labor (Note 20.c) | 495,067 | 477,174 | 542,090 | 482,040 |
Civil (Note 20.c) | 2,102 | 178,478 | 143,072 | 231,111 |
Credit Cards | 1,828,293 | 1,743,455 | 1,716,259 | 1,533,076 |
Actuarial Losses - Pension Plan | 136,402 | 111,103 | 136,130 | 110,388 |
Legal Fees and Costs | 81,065 | 91,095 | 82,379 | 91,008 |
Serasa and SPC (Credit Reporting Agency) | 62,388 | 58,126 | 63,801 | 60,858 |
Brokerage Fees | 43,545 | 38,808 | 43,545 | 38,030 |
Commissions | 996,027 | 591,841 | 1,558,597 | 1,208,720 |
Provision for Financial Guarantees Provided | - | 68,864 | - | 68,864 |
Others (1) | 1,859,355 | 1,559,183 | 3,963,113 | 2,939,560 |
Total | 5,686,616 | 4,945,166 | 8,445,652 | 6,798,739 |
(1) In the semesters ended June 30, 2022 and 2021, it mainly includes monetary restatement on provisions for legal and administrative proceedings and legal obligations, provisions for the benefit guarantee fund and other provisions.
Bank | Consolidated | |||
01/01 to 06/30/2022 | 01/01 to | 01/01 to 06/30/2022 | 01/01 to | |
06/30/2021 | 06/30/2021 | |||
Result on sale of Investments | - | - | - | (59) |
Result on Sale of Other Assets | 50,628 | 48,891 | 32,471 | 45,565 |
Reversal (Recognition) of Allowance for Losses on Other Assets | 3,957 | (18,008) | 19,134 | (12,901) |
Expense on Assets Not in Use | (18,748) | (19,963) | (18,851) | (20,119) |
Gains (Losses) of Capital | (25,630) | (3,212) | (25,508) | (3,278) |
Other Income (Expenses)(1) | 392,522 | 44,876 | 409,026 | 18,869 |
Total | 402,729 | 52,584 | 416,272 | 28,077 |
(1) Non-operating result on the acquisition of equity interest in CIP in 2022 by the equity method, in the amount before taxes of R$347,447 (net of taxes: R$191,096), in the Bank and Consolidated.
29. Employee Benefit Plans - Post-Employment Benefits
a) Complementary Retirement Plan
Banco Santander and its subsidiaries sponsor closed supplementary pension entities and assistance funds, with the purpose of granting retirement and pensions supplementary to those granted by Social Security, as defined in the basic regulations of each plan.
I) Banesprev
Plan I: defined benefit plan, fully funded by Banco Santander, covers employees hired after May 22, 1975, called Recipient Participants and those hired until May 22, 1975, called Aggregated Participants, who are entitled to the benefit. of annuity by death. Plan closed for new members since March 28, 2005.
Plan II: defined benefit plan, created as of July 27, 1994, with the new text of the Bylaws and Basic Regulation of Plan II in force, the participants of Plan I who opted for the new plan started to contribute with 44.9% of the costing rate stipulated by the actuary for each year, implemented in April 2012, extraordinary costing for the sponsor and participants, under the terms agreed with the Superintendency of Complementary Pension (PREVIC), due to a deficit in the plan. Plan closed for new members since June 3, 2005.
Plan V: defined benefit plan, fully funded by Banco Santander, covers employees hired until May 22, 1975, closed with benefits calculated until the end of the plan.
Retirement and Pension Complement Plan - Pre-75:defined benefit plan, created as a result of the privatization process of Banespa, managed by Banesprev and offered only to employees hired until May 22, 1975, with the effective starting date on January 1, 2000. Plan closed for new members since April 28, 2000.
Plan III: variable contribution plan, aimed at employees hired after May 22, 1975, previously covered by Plans I and II. In this plan, contributions are made by the sponsor and the participants. Benefits are in the form of defined contribution during the period of contributions and defined benefit during the benefit receiving phase, if paid in the form of lifetime monthly income. Plan closed for new members since September 1, 2005.
With the objective of promoting greater actuarial stability and adapting the structure of the sponsored plans to the best market practices, a Defined Contribution (DC) plan was created at Banesprev, with the exclusive purpose of receiving, through voluntary migration, participants and beneficiaries of the following DB plans: Plano I, Plano II, Plano V, Plano Pré-75, DCA, DAB, CACIBAN and Sanprev Plano I. The process for creating the CD Plan was approved by Previc in Ordinance No. 611 published on 13/ 09/2021, and the CD Plan was officially created in Mar/22.
Banco Santander (Brasil) S.A. accounted for the impacts arising from the migration and creation of the new CD Plan on 03/31/2022, and in the result an expense of R$ 42 million was recorded, in OCI a gross gain in the amount of R$ 228 million was calculated and at Banesprev it was made investment in the amount of R$ 117 million. This extraordinary contribution was due to the portion of the sponsors' insufficiency of responsibility for the loss-making plans.
Plan IV: variable contribution plan, aimed at employees hired from November 27, 2000, in which the sponsor only contributes to risk benefits and administrative costs. In this plan, the programmed benefit is in the form of defined contribution during the period of contributions and defined benefit during the benefit receiving phase, in the form of lifetime monthly income, in whole or in part of the benefit. The plan's risk benefits are in the form of a defined benefit. Plan closed for new members since July 23, 2010.
Three Plans (DCA, DAB and CACIBAN): supplementary retirement and pensions for former associates, arising from the acquisition process of the former Banco Meridional, constituted under the defined benefit modality. Plans closed for new adhesions before the acquisition of Grupo Bozano Simonsen by Banco Santander in November 1999.
Sanprev I Plan: defined benefit plan, created on September 27, 1979, covering employees of sponsors enrolled in the plan and has been in the process of extinction since June 30, 1996.
Sanprev II Plan: plan that offers risk coverage, temporary pension supplementation, disability retirement and death benefit and sickness benefit supplementation and birth aid, covering the employees of the sponsors enrolled in the plan, being funded exclusively by the sponsors, through monthly contributions, when indicated by the actuary. Plan closed for new members since March 10, 2010.
Sanprev III Plan: variable contribution plan, covering employees of sponsors who opted to contribute, through contributions freely chosen by participants from 2% of the contribution salary. In this plan, the benefit is defined contribution during the contribution phase and defined benefit during the benefit receiving phase, in the form of lifetime monthly income, in whole or in part of the benefit. Plan closed for new members since March 10, 2010.
II) Bandeprev - Bandepe Social Security (Bandeprev)
Defined benefit plan sponsored by Banco Bandepe S.A. and Banco Santander, managed by Bandeprev. The plans are divided into a basic plan and a special supplementary retirement plan, with differences in eligibility, contributions and benefits by subgroups of participants. The plans have been closed to new adhesions since 1999 for the employees of Banco Bandepe S.A. and for the others since the year 2011.
III) Other Plans
SantanderPrevi - Private Pension Society (SantanderPrevi): is a closed supplementary pension entity, whose objective is the establishment and execution of benefit plans of a social security nature, complementary to the general social security system, in the form of the current legislation.
The SantanderPrevi Retirement Plan is structured in the Defined Contribution modality and has been closed to new members since July 2018, as approved by PREVIC, with contributions being shared between the sponsoring companies and the plan participants. The amounts appropriated by the sponsors for the first semester ended June 30, 2022 were R$28,063 (2021 - R$25,160) in the Bank and R$28,972 (2021 - R$28,106) in the Consolidated.
It has 10 cases of benefits granted with lifetime income from a previous plan.
SBPREV - Santander Brasil Open Pension: as of January 2, 2018, Santander started to offer this new optional supplementary pension program for new hired employees and for employees who were not enrolled in any other pension plan managed by the Closed Entities Complementary Pension Plan of the Group. This new program includes the PGBL- Free Benefit Generator Plan and VGBL-Vida Free Benefit Generator Plan, managed by Icatu Seguros, an Open Supplementary Pension Entity, open to new members, and their contributions are shared between the instituting/stipulator-enrolling companies and plan participants.
The amounts appropriated by the sponsors for the year of 2022 were R$ 9,949 (2021 - R$6,605) in the Bank, and R$ 10,245 (2021 - R$7,888) in the Consolidated.
Determination of Net Actuarial Assets (Liabilities)
Bank | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Banesprev | Santander-Previ | Bandeprev | Banesprev | Santander-Previ | Bandeprev | |||||||
Conciliation of Assets and Liabilities | ||||||||||||
Present Value of Actuarial Obligations | (23,426,492) | (4,309) | (1,525,388) | (24,476,356) | (4,455) | (1,532,427) | ||||||
Fair Value of Plan Assets | 26,974,109 | 3,640 | 2,131,998 | 25,460,958 | 3,703 | 2,182,891 | ||||||
3,547,616 | (669) | 606,609 | 984,602 | (752) | 650,464 | |||||||
Being: | ||||||||||||
Superavit | 4,609,686 | - | 606,609 | 3,070,651 | - | 650,464 | ||||||
Deficit | (1,062,069) | (669) | - | (2,086,049) | (752) | - | ||||||
Amount not Recognized as Assets | 4,390,254 | - | 598,075 | 2,847,412 | - | 642,604 | ||||||
Net Actuarial Asset (Note 12) | 219,431 | - | 8,534 | 223,240 | - | 7,860 | ||||||
Net Actuarial Liability (Note 19) | (1,062,069) | (669) | - | (2,086,049) | (752) | - | ||||||
Payments Made on the Actuarial Liabilities | 727,167 | - | (1) | 581,513 | - | (3) | ||||||
Revenues (Expenses) Recorded on the Actuarial Liabilities | (110,146) | (35) | 294 | (173,600) | (79) | 193 | ||||||
Other Equity Valuation Adjustments | (2,948,896) | 27 | 9,142 | (3,356,005) | (92) | 8,761 | ||||||
Actual Return on Plan Assets | 2,631,450 | 217 | 38,302 | 1,457,501 | 460 | (26,644) |
Opening of gains (losses) actuarial from experience, financial assumptions and demographic hypotheses:
Bank | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Banesprev | Santander-Previ | Bandeprev | Banesprev | Santander-Previ | Bandeprev | |||||||
Experience Plan | (1,036,932) | 44 | (20,704) | (2,437,959) | (467) | (158,262) | ||||||
Changes in Financial Assumptions | 1,388,992 | - | - | 4,279,128 | 554 | 256,647 | ||||||
Gain (Loss) Actuarial - Obligation | 352,060 | 44 | (20,704) | 1,841,169 | 87 | 98,385 | ||||||
Return on Investment, Return Unlike Implied Discount Rate | 1,579,908 | 76 | (50,401) | (416,650) | 220 | (182,577) | ||||||
Gain (Loss) Actuarial - Asset | 1,579,908 | 76 | (50,401) | (416,650) | 220 | (182,577) | ||||||
Change in Irrecoverable Surplus | (1,395,877) | - | 71,486 | (851,997) | - | 84,398 |
Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Banesprev | Santander-Previ | Bandeprev | Banesprev | Santander-Previ | Bandeprev | |||||||
Experience Plan | (1,210,429) | 44 | (20,704) | (2,481,391) | (467) | (158,262) | ||||||
Changes in Financial Assumptions | 1,401,883 | - | - | 4,375,431 | 554 | 256,647 | ||||||
Gain (Loss) Actuarial - Obligation | 191,454 | 44 | (20,704) | 1,894,040 | 87 | 98,385 | ||||||
Return on Investment, Return Unlike Implied Discount Rate | 1,612,377 | 76 | (50,401) | (608,960) | 220 | (182,577) | ||||||
Gain (Loss) Actuarial - Asset | 1,612,377 | 76 | (50,401) | (608,960) | 220 | (182,577) | ||||||
Change in Irrecoverable Surplus | (1,408,692) | - | 71,486 | (714,652) | - | 84,398 |
The table below shows the duration of the actuarial obligations of the plans sponsored by Banco Santander on June 30, 2022 and December 31, 2021:
Duration (in Years) | ||||||||||||
Plans | 06/30/2022 | 12/31/2021 | ||||||||||
Banesprev | ||||||||||||
Plano I | 12.57 | 12.57 | ||||||||||
Plano II | 10.03 | 12.92 | ||||||||||
Plano III | 11.54 | 11.54 | ||||||||||
Plano IV | 14.82 | 14.82 | ||||||||||
Plano V | 7.62 | 9.51 | ||||||||||
Pré-75 | 8.30 | 10.45 | ||||||||||
Meridional DCA, DAB e CACIBAN | 6.47/5.93/7.27 | 6.47/5.93/7.27 | ||||||||||
Sanprev | ||||||||||||
Plano I | 6.79 | 6.79 | ||||||||||
Plano II | 12.76 | 12.76 | ||||||||||
Plano III | 11.06 | 11.06 | ||||||||||
Bandeprev | ||||||||||||
Plano Básico | 10.53 | 10.53 | ||||||||||
Plano Especial I | 7.23 | 7.23 | ||||||||||
Plano Especial II | 6.46 | 6.46 | ||||||||||
SantanderPrevi | ||||||||||||
SantanderPrevi | 8.11 | 8.11 |
b) Medical and Dental Assistance Plan
Cabesp - Employee Beneficent Fund of the Bank of the State of São Paulo:entity dedicated to covering medical and dental expenses of employees hired until the privatization of Banespa in 2000, as defined in the entity's bylaws.
Retired by HolandaPrevi (former name of SantanderPrevi): the Retirement health care plan is for life and is a closed group. Upon termination, the employee must have completed 10 years of employment with Banco Real and 55 years of age. In this case, the continuity of the medical care plan was offered, where the employee pays 70% of the monthly fee and the Bank subsidizes 30%. This rule was in force until December 2002 and after this period, the employee who was dismissed, with the status of Retired HolandaPrevi, bears 100% of the health plan's monthly fee.
Former Banco Real Employees (Retired by Circulars):this is the granting of medical assistance to a former employee of Banco Real. With a lifetime nature, it was granted in the same condition as the active employee, that is, with the same coverage and plan design.
Only the basic plans and the first standard apartment are eligible, if you choose the apartment plan, the beneficiary assumes the difference between the plans plus the co-participation in the basic plan. No new additions of dependents are allowed. It has a subsidy of 90% of the plan.
Retired by Bandeprev: medical assistance plan granted to retirees from Banco do Estado de Pernambuco; it is a lifetime benefit. Banco Santander subsidizes 50% of the plan's value for those who retired until November 27, 1998. For those who retired after that date, the subsidy is 30%.
Directors with Lifetime Benefit (Lifetime Directors):only a small closed group of former Directors from Banco Sudameris are part of this benefit, who are 100% subsidized by the Bank.
Free Clinic: free clinic medical assistance plan is offered on a lifetime basis to retirees who have contributed to the Sudameris Foundation for at least 25 years and has a different standard, if the user chooses an apartment. The plan is offered only in standard infirmary, a situation in which the cost is 100% from the Sudameris Foundation.
Law 9,656 (Directors): Officers, Executive Officers, Vice Presidents and Chief Executive Officer may, for free, opt for a lifetime health care plan, in case of termination of the relationship with Banco Santander or companies of its conglomerate without just cause; provided they meet the following requirements: have contributed for at least 3 (three) years to the health plan; have exercised the function of director at Banco Santander or companies of its conglomerate for at least 3 (three) years; be 55 years of age. The plan will be maintained in the same way as the DIRECTOR enjoyed at the time of his dismissal, including the payment of his share, which must be made by means of a bank slip. Dependents active at the time of dismissal will be kept in the same plan as the DIRECTOR, and the inclusion of new dependents is not allowed under any circumstances.
Life Insurance for Retirees (Life Insurance): granted to retirees by Circulars: indemnity in cases of Natural Death, Disability due to Illness, Accidental Death. The subsidy is 45% of the prize amount. It is a closed mass.
Caixas Assistencial Life Insurance (Life Insurance):included in the life insurance mass in December 2018, the insurance of retirees from the DCA, DAB and CACIBAN plans. This insurance was granted to retirees of the former Banco Meridional, the coverage was in accordance with the retiree's choice at the time of adhesion to the benefit. The Bank subsidy is 50% of the premium for the holder and some retirees have the spouse clause bearing 100% of the cost. It is a closed mass.
Additionally, retired employees are guaranteed, provided that they comply with certain legal requirements and assume the full payment of the respective contributions, the right to remain as a beneficiary of the Banco Santander health plan, under the same conditions of assistance coverage they enjoyed when it was in force. of their employment contracts. Banco Santander's obligations to retirees are valued using actuarial calculations based on the present value of current costs.
Determination of Net Actuarial Assets (Liabilities)
Bank | Consolidated | |||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||||||||||
Cabesp | Other Plans | Cabesp | Other Plans | Cabesp | Other Plans | Cabesp | Other Plans | |||||||||
Conciliation of Assets and Liabilities | ||||||||||||||||
Present Value of Actuarial Obligations | (4,010,353) | (623,935) | (4,342,690) | (613,101) | (4,164,801) | (641,006) | (4,510,768) | (613,101) | ||||||||
Fair Value of Plan Assets | 4,909,370 | - | 4,906,369 | - | 5,098,441 | - | 5,096,262 | - | ||||||||
899,017 | (623,935) | 563,679 | (613,101) | 933,640 | (641,006) | 585,495 | (613,101) | |||||||||
Being: | ||||||||||||||||
Superavit | 899,017 | - | 563,678 | - | 933,640 | - | 585,495 | - | ||||||||
Deficit | - | (623,935) | - | (613,101) | - | (641,006) | - | (613,101) | ||||||||
Amount not Recognized as Assets | (899,017) | - | (563,678) | - | 933,640 | - | 585,495 | - | ||||||||
Net Actuarial Asset (Note 12) | - | - | - | - | - | - | - | - | ||||||||
Net Actuarial Liability (Note 19) | - | (623,935) | - | (613,101) | - | (641,006) | - | (613,101) | ||||||||
Payments Made on the Actuarial Liabilities | 72,586 | 17,812 | 149,181 | 37,255 | 74,131 | 17,812 | 152,096 | 37,255 | ||||||||
Revenues (Expenses) Recorded on the Actuarial Liabilities | 3,070 | (26,427) | 4,001 | (56,798) | 3,091 | (26,427) | 3,626 | (56,798) | ||||||||
Other Equity Valuation Adjustments | (1,285,994) | (7,744) | (1,208,790) | (5,525) | (1,266,644) | (7,744) | (1,190,988) | (5,525) | ||||||||
Actual Return on Plan Assets | 95,039 | - | (111,147) | - | 101,985 | - | (118,549) | - |
Opening of gains (losses) actuarial from experience, financial assumptions and demographic hypotheses:
Bank | Consolidated | |||||||||||||||
06/30/2022 | 12/31/2021 | 06/30/2022 | 12/31/2021 | |||||||||||||
Cabesp | Other Plans | Cabesp | Other Plans | Cabesp | Other Plans | Cabesp | Other Plans | |||||||||
Experience Plan | (115,551) | (18,059) | (336,602) | 49,985 | (120,486) | (18,059) | (340,863) | 49,985 | ||||||||
Changes in Financial Assumptions | 463,380 | 15,841 | 984,402 | 116,272 | 479,825 | 15,841 | 1,020,225 | 116,272 | ||||||||
Changes in Demographic Assumptions | - | - | - | (446) | - | - | - | (446) | ||||||||
Gain (Loss) Actuarial - Obligation | 347,829 | (2,218) | 647,800 | 165,811 | 359,339 | (2,218) | 679,362 | 165,811 | ||||||||
Return on Investment, Return Unlike Implied Discount Rate | (111,933) | - | (498,406) | - | (112,762) | - | (521,100) | - | ||||||||
Gain (Loss) Actuarial - Asset | (111,933) | - | (498,406) | - | (112,762) | - | (521,100) | - | ||||||||
Change in Irrecoverable Surplus | (311,552) | - | (302,576) | - | (323,799) | - | (313,894) | - |
The table below shows the duration of the actuarial obligations of the plans sponsored by Banco Santander on June 30, 2022 and December 31, 2021:
Duration (in Years) | ||||||||||||
Plans | 06/30/2022 | 12/31/2021 | ||||||||||
Cabesp | 12.44 | 16.03 | ||||||||||
Bandepe | 18.03 | 18.03 | ||||||||||
Free Clinic | 9.54 | 12.28 | ||||||||||
Lifelong Directors | 9.36 | 9.36 | ||||||||||
Health Directors | 22.81 | 30.28 | ||||||||||
Circular (1) | 11.62 E 12.97 | 11.62 e 12.96 | ||||||||||
Life Insurance | 8.04 | 8.04 |
(1) Duration 11.62 refers to the plan for Former Employees of Banco ABN Amro (31/12/2021 - 13.47) and 12.97 to the plan for Former Employees of Banco Real (31/12/2021 – 11.92).
c) Management of Plan Assets
The main asset categories as a percentage of total plan assets as of June 30, 2022, valid as of December 31, 2021, are as follows:
Bank/Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Equity Instruments | 0.0% | 0.0% | ||||||||||
Debt Instruments | 96.7% | 96.7% | ||||||||||
Real Estate | 0.2% | 0.2% | ||||||||||
Others | 3.2% | 3.2% |
d) Actuarial Assumptions Adopted
Below are the actuarial assumptions adopted:
Bank/Consolidated | ||||||||||||
06/30/2022 | 12/31/2021 | |||||||||||
Pension | Health | Pension | Health | |||||||||
Nominal Discount Rate for Actuarial Obligation and Rate Calculation of Interest Under Assets to the Next Year | 9.1% | 9.2% | 8.4% | 8.4% | ||||||||
Estimated Long-term Inflation Rate | 3.0% | 3.0% | 3.0% | 3.0% | ||||||||
Estimated Salary Increase Rate | 3.5% | 3.5% | 3.5% | 3.5% | ||||||||
Boards of Mortality | AT2000 | AT2000 | AT2000 | AT2000 |
(1) Banesprev II, V and Pre-75;
(2) Cabesp.
e) Sensitivity Analysis
The assumptions related to the significant actuarial assumptions have an effect on the amounts recognized in income and on the present value of the obligations. Changes in the interest rate, mortality table and health care cost, on June 30, 2021, and December 31, 2021, would have the following effects:
Bank/Consolidated | ||||||||
06/30/2022 | 12/31/2021 | |||||||
Effect on Current Service Cost and Interest | Effect on the Present Value of Obligations | Effect on Current Service Cost and Interest | Effect on the Present Value of Obligations | |||||
Discount Rate | ||||||||
(+)0,5% | (25,444) | (305,114) | (25,444) | (305,114) | ||||
(-)0,5% | 28,133 | 337,349 | 28,133 | 337,349 | ||||
Boards of Mortality | ||||||||
Applied (+) 2 years | (44,619) | (535,039) | (44,619) | (535,039) | ||||
Applied (-) 2 years | 47,934 | 574,793 | 47,934 | 574,793 | ||||
Cost of Medical Care | ||||||||
(+)0,5% | 31,280 | 375,089 | 31,280 | 375,089 | ||||
(-)0,5% | (28,762) | (344,891) | (28,762) | (344,891) |
f) Share-Based Compensation
Banco Santander has long-term compensation programs linked to the performance of the market price of its shares. Members of Banco Santander's Executive Board are eligible for these plans, in addition to the participants who have been determined by the Board of Directors, whose choice will take into account the seniority of the group. The members of the Board of Directors only participate in said plans when they hold positions on the Executive Board.
Program | Liquidity Type - Referring to the 2nd Quarter | Vesting Period | Period of Exercise/Settlement | 01/01 a | 01/01 a | ||||||
Locais | Santander Brasil Bank Shares | 01/2019 to 12/2021 | 2022 e 2023 | R$40,403 | (*) | R$4,916,667 | (*) | ||||
01/2020 to 12/2022 | 2023 | R$4,002,000 | (*) | R$4,668,000 | (*) | ||||||
01/2020 to 12/2022 | 2023 e 2024 | R$800,000 | (*) | R$5,666,667 | (*) | ||||||
01/2021 to 06/2024 | 2024 | R$20,600,000 | (*) | R$9,959,600 | (*) | ||||||
01/2021 to 12/2023 | 2023 | R$1,680,000 | (*) | R$800,000 | (*) | ||||||
07/2019 to 06/2022 | 2022 | 111,066 | SANB11 | 123,158 | SANB11 | ||||||
09/2020 to 09/2022 | 2022 | 309,427 | SANB11 | 467,873 | SANB11 | ||||||
01/2020 to 09/2023 | 2023 | 204,139 | SANB11 | 279,326 | SANB11 | ||||||
01/2021 to 12/2022 | 2023 | 139,163 | SANB11 | 238,342 | SANB11 | ||||||
01/2021 to 12/2023 | 2024 | 343,863 | SANB11 | 327,065 | SANB11 | ||||||
01/2021 to 01/2024 | 2024 | 24,441 | SANB11 | 39,944 | SANB11 | ||||||
03/2022 to 03/2025 | 2025 | 28,257 | SANB11 | - | SANB11 | ||||||
Global | Santander Spain Shares and Options | 2023 | 159,253 | SAN (**) | 318,478 | SAN(**) | |||||
2023, with a limit for exercising the options until 2030 | 832,569 | Options without SAN (**) | 1,664,983 | Options without SAN (**) | |||||||
02/2024 | 124,184 | SAN (**) | 142,215 | SAN (**) | |||||||
02/2024, with a limit for exercising the options until 02/2029 | 370,477 | Options without SAN (**) | 424,268 | Options without SAN (**) | |||||||
2025 | 150,703 | SAN (**) | - | SAN (**) | |||||||
2025, with a limit for exercising the options until 2030 | 578,713 | Options without SAN (**) | - | Options without SAN (**) | |||||||
Balance of Plans on June 30, 2022 | R$27,122,403 | (*) | R$26,010,933 | (*) | |||||||
1,160,356 | SANB11 | R$1,475,708 | SANB11 | ||||||||
434,140 | SAN | R$460,693 | SAN | ||||||||
1,781,759 | Options without SAN (**) | R$2,089,251 | Options without SAN (**) |
(*) Plan target in Reais, to be converted into SANB11 shares according to the achievement of the plan's performance indicators at the end of the vesting period, based on the quotation of the last 15 trading sessions of the month immediately preceding the grant.
(**) Target of the plan in SAN shares and options, to be paid in cash at the end of the vesting period, according to the achievement of the plan's performance indicators.
Our long-term programs are divided into Local and Global plans, with specific performance indicators and condition of maintaining the participant's employment relationship until the payment date in order to be entitled to receive.
Global ILP Plans
We currently have 2 global plans launched in 2019 and 2020. Eligible executives had an incentive target set in reais. The payment according to compliance with the performance indicators will be calculated in shares and options of grupo Santander (SAN), after a deferral period of three years, with equivalent settlement in Reais.
Pricing Model
The pricing model is based on the Local Volatility model or Dupire model, which allows simultaneous calibration of all European listed options. In addition to this model there is an extension to deal with the uncertainty in dividends, where part of the dividend value is considered confirmed, and the remainder is linked to the performance of the underlying. This extended model is integrated into a PDE engine, which numerically solves the corresponding stochastic differential equation to calculate the expected value of the product.
Data and assumptions used in the pricing model, including weighted average stock price, exercise price, expected volatility, option life, expected dividends, and risk-free interest rate
• Weighted average share price (and exercise price) is €3,104 based on 15-day weighted average between 07/01/2022 and 01/27/2022
• The expected volatility used was 33.80
• Options expire on 02/01/2030
• Expected dividends range from approximately 6.6 cents in the short term (2022) to approximately 5.75 cents per share per year over the long term (2030)
• The discount curve used gives a discount of 0.96 for 2030
The exercise price, in all cycles and if the objectives set out in the regulations are met, shall be the market price on the date of the year.
Long-Term Incentive Plans (ILP)
Long-term incentive plans may be granted in accordance with the strategy of new companies in the specific group or business.
Each plan will have a specific contract and its calculation and payment must be approved by established governance, observing local and global regulatory resolutions.
The reference value of each participant will be converted into SANB11 shares, usually by the quotation of the last 15 trading sessions of the month immediately preceding the payment of the plan.
At the end of the vesting period the payment is of the resulting actions in the case of local plans, or of the amount equivalent to the shares /options of the global plans are made with a restriction of 1 year, and this payment is still subject to the application of the Malus/Clawback clauses, which may reduce or cancel the shares to be delivered in cases of non-compliance with internal standards and exposure to excessive risks.
f.1) Impact on Result
The impacts on the result are recorded in the Personnel Expenses item, as follows:
Bank | ||||||||||||
01/01 to 06/30/2022 | 01/01 to 06/30/2021 | |||||||||||
Program | Liquidity Type | |||||||||||
Local | Santander Shares (Brazil) | 12,622 | 10,107 | |||||||||
Global | Santander Spain Shares and Options | 1,599 | 1,958 | |||||||||
f.2) Variable Remuneration Referenced to Shares
The long-term incentive plan (deferral) determines the requirements for payment of future deferred installments of variable compensation, considering the financial bases
long-term sustainability, including the possibility of applying reductions or cancellations depending on the risks assumed and fluctuations in the cost of capital.
The variable compensation plan with payment based on Banco Santander shares is divided into 2 programs: (i) Identified Collective and (ii) Other Employees. The impacts on the result
are accounted for under Personnel Expenses, as follows:
Bank | Consolidated | |||||||||||
Program | Participant | Liquidity Type | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | 01/01 to 06/30/2022 | 01/01 to 06/30/2021 | ||||||
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) | 18,470 | 14,384 | 20,026 | 14,212 | ||||||
Unidentified Collective | Management-level employees and employees who are benefited by the Deferral Plan | 50% in cash indexed to 100% of CDI and 50% in shares (Units SANB11) | 48,658 | 2,706 | 49,757 | 2,789 |
30. Risk Management, Capital and Sensitivity Analysis
a) 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 -, attending 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 Involvement encouraging consistent risk management and control;
• 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
Credit Risk management is based on monitoring indicators of the credit portfolio and new operations. Taking into account the economic scenario, profitability and default projections are made, which must comply with the Risk Appetite control. These projections are considered for the redefinition of credit policies, which affect both the credit assessment for a specific customer and for a specific profile of customers with similar characteristics.
Another relevant aspect is preventive credit management, which plays a fundamental role in maintaining the quality of Banco Santander's portfolio. Constant monitoring of the customer base is part of the daily routine of the entire commercial area, always with the support of the central areas.
In this challenging scenario imposed by the COVID-19 pandemic, the portfolio and customers were monitored very carefully. In an attempt to mitigate major liquidity impacts of companies and provide the necessary financial support to help all sectors of the economy, all new productions and extensions were analyzed in order to meet the needs of customers, always maintaining the established risk classification criteria. and governance for approval of new operations.
To measure the credit quality of a customer or an operation, the bank uses its own internal score/rating models, with an independent Methodology and Validation area.
In restructuring and credit recovery, the Bank uses specific collection teams, which can be:
• Specialized internal teams, working directly with delinquent customers, with higher delay ranges with more expressive values; and
• External partners specialized in charging, notifying and judging clients according to internal criteria.
The sale of the non-performing loan portfolio is part of the recovery strategy (only the credit rights), being able to maintain relationship and transactional means with assigned customers.
In addition, it sets up a Provision for Expected Losses Associated with Credit Risk in accordance with the current legislation of the Bacen and the National Monetary Council (Note 8.e.)
B. Market Risk Management
Market Risk can be summarized as the probability of an institution loss, resulting of market fluctuation in relation to its position in operations subject to exposure (interest rates, indices, prices, exchange rates, etc.).
Santander's Market Risk Management adheres to Resolution CMN 4,557 and establishes the management structure for this risk, providing visibility for executive decision-making, dialogue and transparency of the institution's strategic positioning, risk appetite and constant monitoring of the risk profile.
The identification, measurement and monitoring of limits are carried out and disclosed by independent areas of the business units and follow limits established in accordance with the policies and formal governance of Integrated Risk Management. The institution's Market Risk appetite is approved by senior executives and is defined based on careful studies that take into account the risk of portfolio strategies, sensitivities arising from market fluctuations, liquidity gaps and other factors that may affect Banco Santander's portfolios.
C. Operational Risk and Internal Controls
Santander's operational risk management model is based on best practices and its premise is to evaluate, monitor, control, implement improvements to reduce exposure to risks and losses, in line with the risk appetite approved by the Board of Directors and adopting the definition of the Basel Committee and Central Bank of Brazil for operational risks. Our governance model is based on the three lines of defense and has people, structures, policies, methodologies and tools to support the adequate management of operational risk.
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. Bank´s business is highly dependent on the proper functioning of information technology systems.
Our business is highly dependent on the ability of our information technology systems to accurately process a large number of transactions across numerous and diverse markets and products in a timely manner, and on our ability to rely on our digital technologies, computer and email services, software and networks, as well as on the secure processing, storage and transmission of confidential data and other information in our computer systems and networks. The proper functioning of our financial control, risk management, accounting, customer service and other data processing systems is critical to our business and our ability to compete effectively.
E. Compliance and Reputacional Risk Management
Compliance risk management has a preventive nature and includes monitoring, educational processes, advisory, risk assessment and corporate communication related to the rules and regulations applicable to each business area of the Bank.
F. Unit for the Anti Money Laundering (AML) and Coutering of Financing of Terrorism (CFT)
Area responsible for promoting the development of prevention of money laundering and combating the financing of terrorism in the different business units. Also responsible for the guidelines of the Bank's customer acceptance policy. Establishes regulations, procedures and acculturation related to the theme. Supervises and monitors the risks inherent in the products and transactions carried out.
G. Social and Environmental Risk
Banco Santander's Social and Environmental Responsibility Policy (PRSA), which follows the guidelines of CMN Resolution No. 4,327/2014 and SARB Regulation No. 14 of Febraban, establishes guidelines and consolidates specific policies for socio-environmental practices in business and in the relationship with stakeholders. These practices include the management of socio-environmental risks, impacts and opportunities related to topics such as, for example, adequacy in the granting and use of credit, supplier management and analysis of socio-environmental risk, which is carried out through the analysis of socio-environmental practices of customers Wholesale , from the Empresas 3 segment of the Retail segment (one of the Bank's Corporate segments), which have credit limits or risk above R$5 million and which are part of the 14 socio-environmental care sectors. In this case, the socio-environmental risk is analyzed in order to mitigate operational risk, capital risk, credit risk and reputational risk. Since 2009, Santander has been a signatory to the Equator Principles and this set of guidelines is used to mitigate socio-environmental risks in the financing of large projects.
The commitments assumed in the PRSA are detailed in other Bank policies, such as the Anti-Corruption Policy, Supplier Relationship and Approval Policies and the Social and Environmental Risk Policies, in addition to the Private Social Investment Policy, which aims to guide the strategy in this area. theme and present guidelines for social programs that strengthen this strategy.
H. 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 the capital management;
• Ensure that the capital metric limits established in management, risk appetite and the Risk Profile Assessment (RPA) are fulfilled;
• Ensure that the actions related to the institution's strategy consider the impacts generated in the capital allocation;
• Ensure that the Management actively participates in the management and is regularly informed about the behavior of the capital metrics.
At Banco Santander, there is an Executive Vice-President responsible for capital management appointed by the Board of Directors; in addition, there are institutional capital policies, which act as guidelines for capital management, control and reporting (thus fulfilling all the requirements defined in CMN Resolution No. 4,557 / 2017).
For further information, see the "Risk and Capital Management Structure - Resolution nº. 4,557 / BACEN" in "Corporate Governance" and "Risk Management" at https://www.santander.com.br/ri/gerenciamento-de-risco.
b) Operational Limits
06/30/2022 | 12/31/2021 | |||
Tier I Regulatory Capital | 76,350.3 | 76,969.9 | ||
Principal Capital | 69,626.6 | 69,919.9 | ||
Supplementary Capital (Note 18.b) | 6,723.7 | 7,050.1 | ||
Tier II Regulatory Capital (Note 18.b) | 12,659.1 | 12,591.3 | ||
Regulatory Capital (Tier I and II) | 89,009.4 | 89,561.3 | ||
Credit Risk (1) | 546,464.4 | 527,119.3 | ||
Market Risk (2) | 20,899.8 | 15,122.2 | ||
Operational Risk | 59,663.3 | 58,499.8 | ||
Total RWA (3) | 627,027.5 | 600,741.3 | ||
Basel I Ratio | 12.18 | 12.81 | ||
Basel Principal Capital | 11.10 | 11.64 | ||
Basel Regulatory Capital | 14.20 | 14.91 |
(1) Exposures to credit risk subject to the calculation of the capital requirement using the standardized approach (RWACPAD) are based on the procedures established by Bacen Circular 3,644, of March 4, 2013 and its subsequent complementation through the wording of Bacen Circular 3,714 of August 20, 2014 and Bacen Circular 3,770 of October 29, 2015.
(2) Includes installments for market risk exposures subject to interest rate variations (RWAjur1), foreign currency coupons (RWAjur2), price indices (RWAjur3), and interest rate coupons (RWAjur4) , the price of commodities commodities (RWAcom), the price of shares classified in the trading book (RWAacs) and installments for exposure to gold, foreign currency and operations subject to exchange variation (RWAcam).
(3) Risk Weighted Assets or risk-weighted asset
Banco Santander publishes the Risk Management Report with information regarding risk management, a brief description of the Recovery Plan, capital management, PR and RWA. The report with more details on the assumptions, structure and methodologies can be found at the electronic address www.santander.com.br/ri.
Financial institutions are required to maintain the investment of funds in permanent assets in accordance with the adjusted Reference Equity level. The funds invested in permanent assets, calculated on a consolidated basis, are limited to 50% of the value of the Reference Equity adjusted pursuant to CMN Resolution No. 4,957/2021. Banco Santander meets the established requirements.
c) Financial Instruments - Sensitivity Analysis
Risk management is focused on portfolios and risk factors, in accordance with Bacen regulations and international best practices.
Financial instruments are segregated into the trading and banking portfolios, as performed in the management of market risk exposure, in accordance with the best market practices and the criteria for classifying operations and capital management of the Basel Standardized Method of the Bacen. The trading portfolio consists of all transactions with financial instruments and commodities, including derivatives, held with the intention of trading. The banking portfolio consists of structural operations arising from Banco Santander's various business lines and their eventual hedges. Therefore, according to the nature of Banco Santander's activities, the sensitivity analysis was divided between the trading and banking portfolios.
Banco Santander performs a sensitivity analysis of financial instruments in accordance with CVM Instruction No. 475/2008, considering market information and scenarios that would adversely affect the Bank's positions.
The summary tables presented below summarize sensitivity values generated by Banco Santander's corporate systems, referring to the trading book and the banking book, for each of the portfolio scenarios as of June 30, 2022.
Trading Portfolio | Consolidated | |||||||
Risk Factor | Description | Scenario 1 | Scenario 2 | Scenario 3 | ||||
Interest Rate - Real | Exposures subject to Changes in Interest Fixed Rate | (1,808) | (60,786) | (121,572) | ||||
Coupon Interest Rate | Exposures subject to Changes in Coupon Rate of Interest Rate | (38) | (574) | (1,148) | ||||
Coupon - US Dollar | Exposures subject to Changes in Coupon US Dollar Rate | (347) | (1,465) | (2,930) | ||||
Coupon - Other Currencies | Exposures subject to Changes in Coupon Foreign Currency Rate | (255) | (3,279) | (6,558) | ||||
Foreign Currency | Exposures subject to Foreign Exchange | (841) | (21,027) | (42,053) | ||||
Eurobond/Treasury/Global |
| (201) | (1,516) | (3,033) | ||||
Inflation | Exposures subject to Change in Coupon Rates of Price Indexes | (1,302) | (15,357) | (30,713) | ||||
Shares and Indexes | Exposures subject to Change in Shares Price | (161) | (4,027) | (8,054) | ||||
Commodities | Exposures subject to Change in Commodity Price | (145) | (3,628) | (7,257) | ||||
Total (1) | (5,098) | (111,659) | (223,318) |
(1) Amounts net of tax effects.
Scenario 1: shock of +10bps on yield curves and 1% for price changes (currencies and shares);
Scenario 2: shock of +25% and -25% in all risk factors, considering the largest losses by risk factor.
Scenario 3: shock of +50% and -50% in all risk factors, considering the largest losses by 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 | (58,379) | (2,367,554) | (5,022,625) | ||||
TR and Long-Term Interest Rate - (TJLP) | Exposures subject to Change in Exchange TR and TJLP | (6,106) | (156,547) | (293,217) | ||||
Inflation | Exposures subject to Change in Coupon Rates of Price Indexes | (32,863) | (474,732) | (875,698) | ||||
Coupon - US Dollar | Exposures subject to Changes in Coupon US Dollar Rate | (11,418) | (85,156) | (162,192) | ||||
Coupon - Other Currencies | Exposures subject to Changes in Coupon Foreign Currency Rate | (198) | (6,058) | (12,580) | ||||
Interest Rate Markets International | Exposures subject to Changes in Interest Rate Negotiated Roles in International Market | (31,337) | (272,646) | (561,308) | ||||
Foreign Currency | Exposures subject to Foreign Exchange | (2,315) | (57,864) | (115,728) | ||||
Total (1) | (142,616) | (3,420,556) | (7,043,348) |
(1) Amounts net of tax effects.
Scenario 1: shock of +10bps on yield curves and 1% for price changes (currencies);
Scenario 2: shock of +25% and -25% in all risk factors, considering the largest losses by risk factor.
Scenario 3: shock of +50% and -50% in all risk factors, considering the largest losses by risk factor.
During the semester ended on June 30, 2022 and the year ended on December 31, 2021, several corporate movements were implemented in order to reorganize the operations and activities of the entities in accordance with the business plan of Banco Santander (Brasil) S.A. (“Banco Santander”, “Santander Brasil” or “Company”):
a) Acquisition of interest in CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitals S.A.
On January 21, 2022, Santander Corretora de Seguros, Investimentos e Serviços S.A. (“Santander Corretora”), together with other investors, together with CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitals S.A. (“CSD BR”) and its respective shareholders, a certain investment agreement and other covenants (“Agreement”) with a view to subscribing a minority interest in CSD BR (“Transaction”). CSD BR operates as a registrar of financial assets, derivatives, securities and insurance policies, authorized by the Central Bank of Brazil, the Securities and Exchange Commission and the Superintendence of Private Insurance. After the fulfillment of the conditions precedent established in the Agreement, the closing of the Transaction took place on May 26, 2022, so that Santander Corretora now holds 20% (twenty percent) of the equity interest of CSD BR.
b) Sale of the entire interest held in Paytec Tecnologia em Pagamentos Ltda. and Paytec Logística e Armazém Ltda.
On May 26, 2022, Banco Santander entered into an agreement with Getnet Adquirência e Serviços para Meios de Pagamento S.A. – Payment Institution (“Getnet IP”), the agreement for the purchase and sale of shares, transfer of ownership and other covenants, of 100% of the shares of Paytec Tecnologia em Pagamentos Ltda. ("Operation"). With the implementation of the Transaction, Getnet IP directly holds 100% of the shares of Paytec Tecnologia em Pagamentos Ltda and indirectly controls Paytec Logística e Armazém Ltda.
c) Acquisition of Equity Interest in Monetus Investimentos Ltda. and Monetus Corretora de Seguros Ltda.
On June 15, 2021, Santander Distribuidora de Títulos e Valores Mobiliários S.A. (“Santander DTVM”, new corporate name of PI Distribuidora de Títulos e Valores Mobiliários S.A.), Toro Corretora de Títulos e Valores Mobiliários S.A. (“Toro CTVM”), and Toro Investimentos S.A. (“Toro Investimentos” and, together with Toro CTVM, “Toro”) entered into, together with the partners of Monetus Investimentos Ltda., and Monetus Corretora de Seguros Ltda. (together “Monetus”), investment agreement and other covenants, whereby, once the transaction is completed, Toro Investimentos would hold 100% of the capital stock of Monetus (“Transaction”). Monetus, originally from Belo Horizonte, carries out its activities through an automated objective-based investment application. After the fulfillment of the applicable conditions precedent, the closing of the Transaction was formalized on January 4, 2022.
d) Acquisition of Equity Interest in Mobills Labs Soluções em Tecnologia Ltda. and Mob Soluções em Tecnologia Ltda.
On June 15, 2021, Santander Distribuidora de Títulos e Valores Mobiliários S.A. (“Santander DTVM”, new corporate name of PI Distribuidora de Títulos e Valores Mobiliários S.A.), Toro Corretora de Títulos e Valores Mobiliários S.A. (“Toro CTVM”), and Toro Investimentos S.A. (“Toro Investimentos” and, together with Toro CTVM, “Toro”) entered into, together with the partners of Mobills Labs Soluções em Tecnologia Ltda., and Mob Soluções em Tecnologia Ltda. other covenants, whereby, once the transaction is completed, Toro Investimentos would hold 100% of the share capital of Mobills (“Transaction”). Based in Ceará, Mobills has a variety of financial applications that have a large user base, especially related to financial planning. After the fulfillment of the applicable conditions precedent, the closing of the Transaction was formalized on January 4, 2022.
e) Acquisition of equity interest in Apê11 Tecnologia e Negócios Imobiliários Ltda.
On September 2, 2021, Santander Holding Imobiliária S.A. (“SHI”) – a wholly-owned subsidiary of the Company – entered into, together with the partners of Apê11 Tecnologia e Negócios Imobiliários Ltda. (“Apê11”), certain Share Purchase Agreement and Investment Agreement, by which, once the transaction is concluded, it would hold 90% of the capital stock of Apê11 (“Transaction”). Apê11 acts as a collaborative marketplace, pioneer in digitizing the journey of buying houses and apartments. After the fulfillment of the conditions precedent established in the Share Purchase and Sale Investment Agreement, the closing of the Transaction was formalized on December 16, 2021.
f) Acquisition of Equity Interest in Solutions 4Fleet Consultoria Empresarial Ltda.
On July 13, 2021, Aymoré Crédito, Financiamento e Investimento S.A. (“Aymoré”), together with the partners of Solutions 4Fleet Consultoria Empresarial Ltda. (“Solutions4Fleet”), certain Share Investment and Purchase Agreement, whereby, once the transaction is completed, Aymoré would hold 80% of the share capital of Solutions 4Fleet (“Transaction”). Solutions 4Fleet specializes in structuring vehicle rental and subscription businesses – a long-term rental modality for individuals. After the fulfillment of the conditions precedent established in the Share Purchase and Sale Investment Agreement, the closing of the Transaction was formalized on October 8, 2021.
g) Acquisition of Equity Interest in Leadership Serviços Especializados em Cobranças Ltda. (“Leadership”) and Fozcobra Agência de Cobranças Ltda. (“Fozcobra”) and subsequent merger of Fozcobra by Leadership.
On August 4, 2021, Atual Serviços de Crédito e Meios Digitais S.A. (“Atual”) – a wholly-owned subsidiary of the Company – entered into, together with the partners of Líder Serviços Especializados em Cobranças Ltda. (“Lederança”), a certain Agreement for the Assignment of Quotas and Other Covenants, by which, once the transaction is completed, it would hold 100% of the share capital of Leadership (“Operation”). Leadership works in the area of overdue credit recovery, providing extrajudicial collection services to financial institutions of different sizes, retail chains, telecommunications operators and automakers, among others, and has a subsidiary, Fozcobra Agência de Cobranças Ltda. After the fulfillment of the conditions precedent established in the Agreement for the Assignment of Quotas and Other Covenants, the closing of the Transaction was formalized on October 1, 2021. Subsequently, Fozcobra was merged into Leadership on October 4, 2021.
h) Acquisition of Equity Interest in Car10 Tecnologia e Informação S.A. and Pag10 Eireli Mercantile Development.
On July 13, 2021, Webmotors S.A. (“Webmotors”), celebrated, together with the partners of Car10 Tecnologia e Informação S.A. (“Car10 Tecnologia”) and Pag10 Fomento Mercantil Eireli. (“Pag10” and, together with Car10 Tecnologia, “Car10”), certain Share Investment and Purchase and Sale Agreements, by which, once the transaction is completed, Webmotors would hold approximately 66.7% of the share capital of Car10 Tecnologia which, in turn, is the sole owner of Pag10 (“Operation”). Car10 acts as a marketplace that brings together more than 7,000 service providers such as workshops and autocenters; auto body and Paint; and cleaning and sanitizing, in addition to emergency assistance and towing. After complying with the conditions precedent established in the Share Purchase and Sale Investment Agreement, the closing of the Transaction was formalized on September 20, 2021
i) Corporate reorganization Santander Leasing S.A. Commercial Leasing and Banco Bandepe S.A.
On May 11, 2021, Banco Santander (Brasil) S.A. (“Banco Santander”) and Banco Bandepe S.A. (“Bandepe”) entered into a Share Purchase and Sale Agreement through which Banco Santander acquired the entire equity interest held by Bandepe in Santander Leasing S.A. Commercial Lease (“Santander Leasing”), which corresponds to 21.42%. In this operation, Banco Santander became the sole shareholder of Santander Leasing. On May 27, 2021, the merger of all the shares of Bandepe into Santander Leasing was approved, in order to convert Bandepe into a wholly-owned subsidiary of Santander Leasing (“Merger of Shares”).
j) Signing of an Agreement for the Acquisition of Equity Interest in Toro Controle
On September 29, 2020, Santander Distribuidora de Títulos e Valores Mobiliários S.A. (“Santander DTVM”, new corporate name of PI Distribuidora de Títulos e Valores Mobiliários S.A.), which is indirectly controlled by Banco Santander, entered into with the shareholders of Toro Controle e Participações S.A. (“Toro Controle”), investment agreement and other covenants. Toro Controle was a holding company that ultimately controlled Toro Corretora de Títulos e Valores Mobiliários Ltda. (“Toro CTVM”) and Toro Investimentos S.A. (“Toro Investimentos” and collectively “Toro”). Toro is an investment platform founded in Belo Horizonte in 2010. In 2018, it received the necessary authorizations and started its operation as a securities broker aimed at the retail public. After the fulfillment of all applicable suspensive conditions, including approval by the Central Bank of Brazil, the transaction was carried out on April 30, 2021, with the acquisition of shares representing 60% of the share capital of Toro Controle and their immediate incorporation by Toro CTVM, so that Santander DTVM became the direct owner of the equivalent of 60% of the share capital of Toro CTVM, which, in turn, holds 100% of the share capital of Toro Investimentos.
k) Partial spin-off of Getnet Adquirência e Serviços para Meios de Pagamento S.A.
After the approval of the studies and a favorable proposal from the Board of Directors of Santander Brasil, on March 31, 2021, the shareholders of Santander Brasil approved the partial spin-off of Santander Brasil, for the segregation of the shares owned by Getnet Adquirência e Serviços for Meios de Pagamento S.A. (“Getnet”), with version of the spun-off portion for Getnet itself. Upon completion of the spin-off, the shareholders of Santander Brasil became direct shareholders of Getnet in proportion to their participation in the capital stock of Santander Brasil.
As a result of the Spin-off, the share capital of Santander Brasil was reduced in the total amount of $ 2,000,000 (two billion reais), without the cancellation of shares, with the share capital of Santander Brasil passing from $ 57,000,000 (fifty-seven billion reais) to $ 55,000,000 (fifty-five billion reais).
l) Acquisition of Equity Interest in Paytec Tecnologia em Pagamentos Ltda. and Paytec Logística e Armazém Eireli
On December 8, 2020, Banco Santander signed, together with the partners and holders of Paytec Tecnologia em Pagamentos Ltda. and Paytec Logística e Armazém Eireli (together “Paytec”), a contract for the purchase and sale of shares, transfer of ownership and other covenants, whereby, once the transaction is completed, it would hold 100% of Paytec's share capital. Paytec acts as a logistics operator with national coverage and focused on the payments market. Upon compliance with the conditions established in the contract, in particular the applicable regulatory approvals, the parties formalized the definitive instruments on March 12, 2021. With the completion of the transaction, Banco Santander now holds 100% of Paytec's share capital. As informed in item b above, these interests were sold on May 26, 2022 to Getnet IP.
m) Acquisition of Equity Interest in Gira – Integrated Management of Receivables of Agronegócio S.A.
On August 11, 2020, Banco Santander entered into, with the shareholders of Gira – Gestão Integrada de Recebíveis do Agronegócio S.A., a share purchase and sale agreement and other covenants. Gira is a technology company that operates in the management of agribusiness receivables and has a robust technological platform, capable of adding greater security to agricultural credit operations. Upon compliance with the conditions established in the agreement, in particular the applicable regulatory approvals, the parties formalized the definitive instruments on January 8, 2021. With the completion of the transaction, Banco Santander now holds 80% of the share capital of Gira.
a) Co-obligations and risks in guarantees provided to customers, recorded in memorandum accounts, reached the amount of R$ 49,302,212 (12/31/2021 - R$49,624,633) at the Bank and R$ 49,302,212 (12/31/2021) 2021 - R$49,624,633) in the Consolidated.
b) The total amount of investment funds and assets under management by Conglomerate Santander is R$ 2,572,673 (12/31/2021 - R$2,770,684) and the total amount of investment funds and assets under management is R$ 263,217,162 (12/31/2021 - R$192,927,475) recorded in memorandum accounts.
c) The insurance in force on June 30, 2022, corresponding to coverage of fires, natural disasters and other risks related to properties, has a coverage value of R$ 9,214,986 (12/31/2021 - R$9,214,986) in the Bank and Consolidated. In addition, the Bank and the Consolidated on June 30, 2022, there are other policies in force to cover risks related to fraud, civil liability and other assets in the amount of R$ 1,546,051 (12/31/2021 – R$ 1,546,120).
d) Between June 30, 2022 and December 31, 2021, there were no related active operations and obligations for related active operations.
e) Clearing and Settlement of Obligations Agreements - CMN Resolution 3,263/2005 - Banco Santander has an agreement for clearing and settlement of obligations within the scope of the National Financial System (SFN), entered into with individuals and legal entities that are or are not members of the SFN, resulting in in greater guarantee of financial settlement, with the parties which have this type of agreement. These agreements establish that payment obligations to Banco Santander arising from credit and derivative transactions, in the event of default by the counterparty, will be offset against Banco Santander's payment obligations to the counterparty.
f) Other Commitments - Banco Santander has two types of lease contracts: cancelable and non-cancellable. The cancelables are properties, mainly used as branches, based on a standard contract, which can be canceled at will and includes the right of option to renew and readjustment clauses, framed in the concept of operational leasing. The total of future minimum payments for non-cancellable operating leases is shown below:
06/30/2022 | 12/31/2021 | |||
Up to 1 Year | 411,188 | 715,576 | ||
Between 1 to 5 years | 1,267,533 | 1,420,853 | ||
More than 5 Years | 145,868 | 181,417 | ||
Total | 1,824,589 | 2,317,846 |
Additionally, Banco Santander has contracts with an indefinite term, in the amount of R$ 822 (12/31/2021 - R$801) corresponding to the monthly rent of contracts with this feature. Operating lease payments, recognized as expenses in the first semester of 2022, amounted to R$ 369,221 (2021 - R$368,663).
Rental contracts will be readjusted annually, in accordance with current legislation, with the highest percentage being in accordance with the variation of the General Market Price Index (IGPM). The lessee is assured the right to unilaterally terminate these contracts, at any time, in accordance with contractual clauses and current legislation. Market Value of Financial Assets and Liabilities
g) Market value of assets and liabilities - Banco Santander classifies measurements at market value using the market value hierarchy that reflects the model used in the measurement process, and is in accordance with the following hierarchical levels:
Level 1: Determined based on public (unadjusted) price quotations in active markets for identical assets and liabilities, include government bonds, shares and listed derivatives. Highly liquid securities with prices observable in an active market are classified at level 1. At this level, most Brazilian Government Bonds (mainly LTN, LFT, NTN-B and NTN-F), stocks on the stock exchange were classified. and other securities traded on the active market. Derivatives traded on stock exchanges are classified at level 1 of the hierarchy.
Level 2: These are derivatives of data other than quoted prices included in Level 1 that are observable for the asset or liability, directly (such as prices) or indirectly (derived from prices). When price quotations cannot be observed, Management, using its own internal models, makes its best estimate of the price that would be set by the market. These models use data based on observable market parameters as an important reference. The best evidence of the fair value of a financial instrument at initial recognition is the transaction price, unless the fair value of the instrument can be obtained from other market transactions carried out with the same instrument or similar instruments or can be measured using a valuation technique in which the variables used include only observable market data, particularly interest rates. These securities are classified at level 2 of the fair value hierarchy and are mainly composed of government securities (repurchase agreements, LCI Cancelable and NTN) in a less liquid market than those classified at level 1. For over-the-counter derivatives, for the valuation of financial instruments (primarily swaps and options), observable market data are normally used, such as exchange rates, interest rates, volatility, correlation between indices and market liquidity. In the pricing of the aforementioned financial instruments, the Black-Scholes model methodology is used (exchange rate options, interest rate index options, caps and floors) and the present value method (discounting future values by curves market).
Level 3: These are derived from valuation techniques that include inputs for assets or liabilities that are not based on observable market variables (non-observable inputs). When there is information that is not based on observable market data, Banco Santander uses models developed internally to properly measure the fair value of these instruments. Level 3 mainly includes Instruments with low liquidity. Derivatives not traded on an exchange and that do not have observable information in an active market were classified as level 3, and are composed, including exotic derivatives.
In Thousands of Brazilian Real | 2022 | |||||||||
Assets | Carrying | Maket Value | 1 | 2 | 3 | |||||
Interbank Investments | 63,107,418 | 63,107,417 | 8,181,987 | 47,444,316 | 7,481,114 | |||||
Securities and Debt Instruments | 219,335,767 | 218,027,622 | 151,682,571 | 12,795,438 | 53,549,612 | |||||
Derivatives Financial Instruments | 26,522,722 | 26,522,722 | - | 26,224,421 | 298,301 | |||||
Lending Operations | 391,619,071 | 385,364,643 | - | - | 385,364,643 | |||||
Total | 700,584,978 | 693,022,404 | 159,864,558 | 86,464,175 | 446,693,670 | |||||
In Thousands of Brazilian Real | 2021 | |||||||||
Assets | Carrying | Maket Value | 1 | 2 | 3 | |||||
Interbank Investments | 33,629,318 | 33,629,318 | 1,224,817 |
| 25,912,368 |
| 6,492,133 | |||
Securities and Debt Instruments | 227,705,982 |
| 228,618,182 |
| 162,531,523 |
| 21,640,333 |
| 44,446,326 | |
Derivatives Financial Instruments | 21,089,724 |
| 21,089,724 |
| - | 20,833,986 |
| 255,738 | ||
Lending Operations | 383,479,674 |
| 377,805,784 | - | - | 377,805,784 | ||||
Total | 665,904,698 | 661,143,008 | 163,756,340 | 68,386,687 | 428,999,981 |
The following is a comparison between the book values of the Bank's financial liabilities measured at a value other than market value and their respective market values as of June 30, 2022 and December 31, 2021:
In Thousands of Brazilian Real | 2022 | |||||||||
Maket Value | ||||||||||
Liabilities | Carrying | 1 | 2 | 3 | ||||||
Deposits | 415,107,189 | 415,075,836 | - | - | 415,075,836 | |||||
Money Market Funding | 90,104,979 | 90,082,022 | - | 90,082,022 | - | |||||
Borrowings and Onlendings | 87,742,315 | 87,742,315 | - | - | 87,742,315 | |||||
Funds from Acceptance and Issuance of Securities | 114,690,328 | 113,567,412 | - | - | 113,567,412 | |||||
Derivatives Financial Instruments | 28,736,137 | 28,736,137 | - | 28,541,548 | 194,589 | |||||
Debt Instruments Eligible to Compose Capital | 19,131,625 | 19,131,625 | - | - | 19,131,625 | |||||
Total | 755,512,573 | 754,335,346 |
| - |
| 118,623,570 |
| 635,711,777 | ||
In Thousands of Brazilian Real | 2021 | |||||||||
Maket Value | ||||||||||
Liabilities | Carrying | 1 | 2 | 3 | ||||||
Deposits | 403,639,687 | 403,598,886 | - | - | 403,598,886 | |||||
Money Market Funding | 95,648,600 | 95,604,396 | - | 95,604,396 | - | |||||
Borrowings and Onlendings | 91,586,750 | 91,586,750 | - | - | 91,586,750 | |||||
Funds from Acceptance and Issuance of Securities | 95,380,860 | 94,198,680 | - | - | 94,198,680 | |||||
Derivatives Financial Instruments | 24,647,231 | 24,647,231 | - | 24,213,648 | 433,583 | |||||
Debt Instruments Eligible to Compose Capital | 19,641,408 | 19,641,408 | - | - | 19,641,408 | |||||
Total | 730,544,536 | 729,277,351 | - |
| 119,818,044 | 609,459,307 |
h) Recurring/non-recurring results
Bank | ||||||||||||
2022 | 2021 | |||||||||||
Recurring Income | Non-recurring Income | 01/01 to 06/30/2022 | Recurring Income | Non-recurring Income | 01/01 to 06/30/2021 | |||||||
Income Related to Financial Operations | 37,482,298 | - | 37,482,298 | 25,092,779 | - | 25,092,779 | ||||||
Expenses on Financial Operations | (25,180,421) | - | (25,180,421) | (6,872,745) | - | (6,872,745) | ||||||
Gross Income Related to Financial Operations | 12,301,877 | - | 12,301,877 | 18,220,034 | - | 18,220,034 | ||||||
Other Operating Revenues (Expenses) (1) | (3,215,251) | (115,848) | (3,331,099) | (4,484,538) | (1,097,007) | (5,581,545) | ||||||
Operating Income | 9,086,626 | (115,848) | 8,970,778 | 13,735,496 | (1,097,007) | 12,638,489 | ||||||
Non-Operating Income (2) | 55,282 | 347,447 | 402,729 | 52,584 | - | 52,584 | ||||||
Income Before Taxes on Income and Profit Sharing | 9,141,908 | 231,599 | 9,373,507 | 13,788,080 | (1,097,007) | 12,691,073 | ||||||
Income Tax and Social Contribution (1)(2) | (537,600) | (111,524) | (649,124) | (4,619,804) | (118,059) | (4,737,863) | ||||||
Profit Sharing | (947,998) | - | (947,998) | (858,133) | - | (858,133) | ||||||
Net Income | 7,656,310 | 120,075 | 7,776,385 | 8,310,143 | (1,215,066) | 7,095,077 | ||||||
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Consolidated | ||||||||||||
2022 | 2021 | |||||||||||
Recurring Income | Non-recurring Income | 01/01 to 06/30/2022 | Recurring Income | Non-recurring Income | 01/01 to 06/30/2021 | |||||||
Income Related to Financial Operations | 42,399,620 | - | 42,399,620 | 30,253,142 | - | 30,253,142 | ||||||
Expenses on Financial Operations | (25,915,755) | - | (25,915,755) | (8,898,749) | - | (8,898,749) | ||||||
Gross Income Related to Financial Operations | 16,483,865 | - | 16,483,865 | 21,354,393 | - | 21,354,393 | ||||||
Other Operating Revenues (Expenses) (1) | (5,385,215) | (165,991) | (5,551,206) | (6,431,119) | (1,097,007) | (7,528,126) | ||||||
Operating Income | 11,098,650 | (165,991) | 10,932,659 | 14,923,274 | (1,097,007) | 13,826,267 | ||||||
Non-Operating Income (2) | 68,825 | 347,447 | 416,272 | 28,077 | - | 28,077 | ||||||
Income Before Taxes on Income and Profit Sharing | 11,167,476 | 181,455 | 11,348,931 | 14,951,351 | (1,097,007) | 13,854,344 | ||||||
Income Tax and Social Contribution (1)(2) | (2,176,947) | (111,524) | (2,288,471) | (5,808,820) | (118,059) | (5,926,879) | ||||||
Profit Sharing | (1,039,055) | - | (1,039,055) | (940,467) | - | (940,467) | ||||||
Non-Controlling Interest | (98,716) | - | (98,716) | (67,918) | - | (67,918) | ||||||
Net Income | 7,852,757 | 69,932 | 7,922,689 | 8,134,146 | (1,215,066) | 6,919,080 |
(1) Amortization of goodwill on investment recognized as Other Operating Expenses in the amount before taxes of R$ 165,991 (2021 - R$1,097,007) in the Bank and Consolidated, with a net impact of taxes of R$ 121,164 (2021 - R$1,051,334).
(2) Non-operating income from the acquisition of equity interest in CIP in 2022, in the amount before taxes of R$347,447 (net of taxes: R$191,096), in the Bank and Consolidated.
Increases in the share capital of Aymoré Crédito, Financiamento e Investimento S.A.
On May 23, 2022, Banco Santander (Brasil) S.A. (“Banco Santander”) subscribed for an increase in the share capital of Aymoré Crédito, Financiamento e Investimento S.A. (“Aymoré”) in the amount of BRL 20,000,000,000.00 (twenty billion reais), paying in that opportunity BRL 10,000,000,000.00 (ten billion reais), in this sense Aymoré’s capital stock became BRL 21,447,672,599.62 (twenty-one billion, four hundred and forty-seven million, six hundred and seventy-two thousand, five hundred and ninety-nine reais and sixty-two centavos), partially paid in. On July 7, 2022, the capital increase was approved by the Central Bank of Brazil (“BACEN”). On July 8, 2022, Banco Santander paid in the remaining amount of R$10,000,000,000.00 (ten billion reais) referring to the subscription carried out on May 23, 2022. On July 8, 2022, a new capital increase with the subscription of BRL 20,000,000,000.00 (twenty billion reais) by Banco Santander, with BRL 10,000,000,000.00 (ten billion reais) paid in immediately. After this new subscription, the share capital of Aymoré became BRL 41,447,672,599.62 (forty-one billion, four hundred and forty-seven million, six hundred and seventy-two thousand, five hundred and ninety-nine reais and sixty-two cents) partially paid in. The capital increase approved on July 8, 2022 is pending approval by BACEN.