6-K 1 EDGAR_3T20_BRGAAP_2710.htm EDGAR_3T20_BRGAAP_2710

 

 

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 September, 2020


 

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

 


INDEX

 

Performance Review.. 3

Balance Sheet 12

Income Statements. 16

Comprehensive Income Statements. 18

Statements of Changes in Stockholders' Equity – Bank. 19

Statements of Changes in Stockholders' Equity – Consolidated. 20

Cash Flows Statements. 22

Statements of Value Added. 23

1.General Information. 24

2.Presentation of Financial Statements. 24

3.Significant Accounting Policies. 27

4.Cash and Cash Equivalents. 28

5.Interbank Investments. 29

6.Securities and Derivatives Financial Instruments. 30

7.Interbank Accounts. 45

8.Loan Portfolio and Allowance for Loan Losses. 45

9.Tax Assets and Liabilities. 48

10.Other Receivables – Other 52

11.Dependences Information and Foreign Subsidiary. 52

12.Investments in Affiliates and Subsidiaries Subsidiary. 53

13.Intangibles. 54

14.Funding. 55

15.Debt Instruments Eligible to Capital 56

16.Other Payables – Other 57

17.Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security. 58

18.Stockholders’ Equity. 62

19.Related Parties. 64

20.Income from Services Rendered and Banking Fees. 72

21.Personnel Expenses. 72

22.Other Administrative Expenses. 72

23.Other Operating Income. 73

24.Other Operating Expenses. 73

25.Non-Operating Income. 74

26.Employee Benefit Plans - Post-Employment Benefits. 74

27.Risk Management, Capital and Sensitivity Analysis. 76

28.Other information. 80

29.Subsequent Events. 81

Composition of Management Bodies. 82

Declaration of directors on the financial statements. 84

Directors' Statement on Independent Auditors. 85

 

 

 

 

 

 

 

 

 

 

Performance Review

Dear Stockholders:

We present the Management Report to Individual and Condensed Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Bank) related to the period ended September 30, 2020, prepared in accordance with accounting practices set by Brazilian Corporate Law, the standards of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and document template provided by the Accounting National Financial System Institutions (Cosif) and the Brazilian Exchange Commission (CVM), that does not conflict with the rules issued by Bacen.

The Parent Company and Consolidated Condensed Interim Financial Statements based on the international accounting standard issued by the International Accounting Standards Board (IASB) for the period ended September 30, 2020 will be simultaneously released at www.santander.com.br/ri.

1. Macroeconomic Environmen

On top of the release of activity indicators across the great majority of economies signaling that fiscal and monetary stimulus packages could have addressed the worst of pandemic’s effect in the last quarter, Santander’s Bank estimates the COVID-19 pandemic developments were the main theme for the third quarter of 2020. Furthermore, Santander estimates that fiscal and monetary stimuli helped to support financial assets prices and to reverse the worsening registered in the first quarter of the year. As an example, the S&P500 index, which dropped from 3.2 thousand to 2.5 thousand points between December 2019 and march 2020, rose 3.1 thousand points in late June, ending the third quarter at approximately 3.4 thousand points (a rise of 8.5% in the period).

In Brazil, Santander considers that the misfortunes generated by COVID-19 shifted the focus from discussions on structural reforms to debates on measures to fight the economic impacts caused by the pandemic, mainly regarding actions directed at the poorest sections of the population and the business segments most exposed to the misfortunes caused by social distancing policies. In Santander’s view, such temporary measures were essential to mitigate the impact of the crisis, but will result in a substantial increase in public expenditure throughout 2020 and, therefore, will cause a significant increase in the level of indebtedness of the Brazilian government. This situation, the Bank evaluates, only reinforces the need to resume discussions on structural reforms after overcoming the pandemic to prevent the trajectory of Brazilian public debt from becoming unsustainable.

After a widespread initial wave of downward revisions to GDP projections in 2020 in the first quarter, the Bank observed that the incentives granted provoked a strong recovery in some segments of the Brazilian economy - notably, in retail trade. This more intense reaction than many had previously imagined led economic agents to start considering less intense falls for the Brazilian GDP this year. While the median projection indicated a 6.6% retraction for the Brazilian GDP at the end of the second quarter of 2020, the median expectation at the end of the third quarter indicated that the Brazilian economy is expected to decline 5.02% this year. The Bank believes that, although less intense, the prospect of a strong contraction in the Brazilian GDP continued to justify the general perception that the IPCA variation should end the year below the target set for 2020 - the median inflation forecast for the year ended the third 2.06%, while the target is 4.0% for 2020. The combination of an expected economic contraction and low inflation is what Santander considers to have given the Brazilian Central Bank room to reduce the base interest rate to its new historical low (2.00% p.a.) in the Copom meeting held in August 2020, in addition to signaling that the Selic rate will remain at this level for an extended period of time.

However, in the Bank's opinion, the scenario of slow growth and high public debt is something that has driven international investors away, which is reflected both in the behavior recorded by the Brazilian 5-year CDS spread as well as in the trajectory of its exchange rate. In the first case, the Brazilian government's instrument of protection against insolvency problems closed the third quarter close to the level recorded in the second quarter (250 basis points and 254 basis points, respectively), although it fluctuated below the level of 200 points during the period. As for the exchange rate, the Bank saw a similar process with the parity against the dollar jumping from USDBRL5.48in the end of June 2020 to USDBRL5.64in the end of the third quarter of this year, even though it was traded close to USDBRL5.11 over the period. In both cases, Santander estimates that the trigger for the worsening recorded in relation to the minimum levels observed in the third quarter is related to the intensification of doubts about the Brazilian fiscal dynamics in the coming years.

Therefore, in order to have an improvement in the performance of these indicators, the Bank believes that measures to signal greater commitment by the Brazilian government with the reversal of the upward trajectory of public spending expected for the years ahead will be necessary. In Santander’s viewpoint, this will only be possible with the resumption of structural reforms.

2. Performance

2.1) Corporate Net Income

 

Consolidated Income Statements (R$ Millions)

9M20

9M19

annual changes%

3Q20

2Q20

quarter changes %

Financial Income

101,346.73 

67,691.86 

49.7 

21,783.26 

27,871.60 

(21.8) 

Financial Expenses

(94,402.81) 

(44,120.6) 

114.0 

(14,493.70) 

(24,175.0) 

(40.0) 

Gross Profit From Financial Operations (a)

6,943.93 

23,571.3 

(70.5)

7,289.56 

3,696.6 

97.2 

Other Operating (Expenses) Income (b)

(8,716.56) 

(9,302.7) 

(6.3) 

(2,595.84) 

(3,647.7) 

(28.8) 

Operating Income

(1,772.63)

14,268.6 

(112.4)

4,693.72 

48.9 

9,498.6 

Non-Operating Income

252.46 

(92.5) 

(372.8) 

15.87 

31.8 

(50.1) 

Income Before Taxes on Income and Profit Sharing

(1,520.17)

14,175.9 

(110.7)

4,709.59 

80.7 

5,735.9 

Income Tax and Social Contribution (a)

12,653.25 

(2,077.4) 

(709.1) 

(412.63) 

2,459.5 

(116.8) 

Profit Sharing

(1,421.24) 

(1,395.2) 

1.9 

(457.73) 

(484.4) 

(5.5) 

Non-Controlling Interest

(101.12) 

(270.6) 

(62.6) 

(28.08) 

(30.1) 

(6.7) 

Consolidated Net Income

9,610.71 

10,432.8 

(7.9)

3,811.15 

2,025.7 

88.1 

 

OPERATING RESULT BEFORE ADJUSTED TAXATION

9M20

9M19

annual
variation%

3Q20

2Q20

annual
variation%

(R$ Million)

Result before Taxation on Profit and Participation

(1,520.0) 

14,176.0 

(110.7) 

4,709.6 

80.6 

5,743.2 

Foreign Exchange Hedge

17,519.2 

2,411.7 

626.4 

2,071.8 

3,145.2 

(34.1) 

Operating Income Before Adjusted Taxation

15,999.2 

16,587.7 

(3.5)

6,781.4 

3,225.8 

110.2 

INCOME TAX

9M20

9M19

annual
variation%

3Q20

2Q20

annual
variation%

(R$ Million)

Income tax and social contribution

12,653.0 

(2,077.0) 

(709.2) 

(412.6) 

2,459.5 

(116.8) 

Foreign Exchange Hedge

(17,519.2) 

(2,411.7) 

626.4 

(2,071.8) 

(3,145.2) 

(34.1) 

Adjusted Income Tax and Social Contribution

(4,866.2)

(4,488.7)

8.4 

(2,484.5)

(685.7)

262.3 

 

The Bank's rapid adaptation to different scenarios, supported by a solid balance sheet position and a well-defined business model, made it possible to capture important opportunities in the period, always prioritizing customer needs. Accordingly, we offer a plan to extend installments of various types of financing granted to customers in order to provide greater financial capacity. In this quarter, an extraordinary provision of R$3.2 billion was made, supported by assumptions based on stress scenarios. In addition, the Bank continued to evolve our risk models, which helped to maintain the quality of the credit portfolio at controlled levels. As a result of our actions in the period, we observed an increase in margins while reaching the best historical level of the efficiency index. Managerial net income reached R$5,989 million, down 15.9% in twelve months and 44.6% in the quarter. Excluding the effect of the extraordinary provision expense, net income totaled R$7,749 million, an increase of 8.8% in twelve months and 1.1% in three months. The return on average shareholders' equity (adjusted for goodwill, reached 17.1% in the first half, down 4.2 pp and 12.0% in three months. Excluding the extraordinary provision expense, ROAE was 22.1% in the first half, an increase of 0.8 pp in twelve months, and 0.4 pp less in three months.

a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches and the Subsidiary Santander Brasil EFC

Banco Santander operates branches in the Cayman Islands and Luxembourg and the subsidiary Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” which are used, mainly, to raise funds in the capital and financial foreign markets, providing credit lines that are extended to clients for trade-related financings and working capital. To protect the exposures to foreign exchange rate variations, the Bank uses derivatives. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (Real) in foreign investments are nontaxable to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives is to protect the after-tax net income.

The different tax treatment of such foreign exchange rate differences results in a volatility on the operational earnings or losses and on the gross revenue tax expense  (PIS/Cofins) and income taxes (IR/CSLL), as demonstrated below:

Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branchs and the subsidiary Santander Brasil EFC
(R$ Million)

9M20

9M19

annual changes%

3Q20

2Q20

quarter changes %

Exchange Variation - Profit From Financial Operations

21,807.26 

3,525.9 

518.49 

2,449.38 

697.0 

251.40 

Derivative Financial Instruments - Profit From Financial Operations

(40,098.66) 

(5,994.8) 

568.89 

(4,587.68) 

(4,024.5) 

13.99 

Income Tax and Social Contribution

17,519.22 

2,411.7 

626.42 

2,071.83 

3,145.2 

(34.13) 

PIS/Cofins - Tax Expenses

772.19 

57.2 

1,249.98 

66.47 

178.8 

(62.83) 

 

2.2) Assets and Liabilities

Consolidated Balance Sheets
(R$ Millions)

Sep/20

Dec/19

annual changes%

Current and Long-Term Assets

968,520.5 

844,294.7 

14.7 

Permanent Assets

13,698.1 

13,248.4 

3.4 

Total Assets

982,218.6 

857,543.1 

14.5 

Current and Long-Term Liabilities

903,720.9 

785,789.3 

15.0 

Deferred Income

577.3 

285.2 

102.4 

Non-Controlling Interest

1,154.5 

1,695.4 

(31.9) 

Stockholders' Equity

76,765.9 

69,773.2 

10.0 

Total Liabilities and Stockholders' Equity

982,218.6 

857,543.1 

14.5 

 

2.3) Stockholders’ Equity

On September 30, 2020, Banco Santander consolidated Stockholders’ Equity increased by 10.2% compared to December 31, 2019.

The change in Stockholders’ Equity between September 30, 2020 and December 31, 2019 was mainly due to the net income for the period in the amount of R$9,611 million, the positive equity valuation adjustment (marketable securities and derivative financial instruments) in the amount of R$1,408 million and in an employee benefit plan in the amount of R$666 million, due to the remeasurement of actuarial obligations due to the change in interest rates caused by the macroeconomic scenario observed until the third quarter of 2020.

For additional information, see explanatory note to financial statements nº23.

2.4) Basel Index

Bacen determines that financial institutions maintain a Reference Equity (PR), PR Level I and Principal 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, risk market risk and operational risk.

As established in CMN Resolution No. 4,193 / 2013, the requirement for PR in 2019 was 10.5%, comprising 8.0% of Minimum Equity of Reference plus 2.5% of Additional Capital Conservation. Considering this surcharge, PR Level I increased to 8.5% and Minimum Principal Capital to 7.0%.

For the base year 2020, the PR requirement remains at 10.25%, including 8.0% of Reference Equity Minimum, plus 1.25% of Capital Conservation Additional and 1.0% of Systemic Additional. PR Level I reaches 8.25% and Minimum Principal Capital 6.75%.

In view of the pandemic scenario, the Central Bank of Brazil has been monitoring the Brazilian market and defining a set of rules to minimize the impacts of the pandemic. In the case of capital, it reduces the reduction in the Additional Capital Conservation Additional from 2.5% to 1.25%, expanding the capacity to grant new credit operations.

The Basel ratio is calculated in accordance with the Financial Statements of the Prudential Conglomerate prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen, as shown below:

Basel Index%

Sep/20

Dec/19

Basel I Ratio

13.58 

13.97 

Basel Principal Capital

12.28 

12.90 

Basel Regulatory Capital

14.86 

15.04 

 

2.5) Main Subsidiaries

The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the period ended September 30, 2020, of the main subsidiaries of Banco Santander:

Subsidiaries (R$ Millions)

Total Assets

Stockholders' Equity

Net
Income

Loan
Portfolio (1)

Ownership/Interest (%)

Aymoré Crédito, Financiamento e Investimento S.A.

48,310.2 

1,304.4 

328.9 

46,083.4 

100% 

Getnet Adquirência e Serviços para Meios de Pagamento S.A.

33,909.0 

2,019.6 

209.9 

100% 

Banco Bandepe S.A.

29,137.5 

5,348.7 

74.5 

100% 

Banco RCI Brasil S.A.

11,247.3 

1,413.1 

139.0 

9,070.4 

39.89% 

Santander Leasing S.A. Arrendamento Mercantil

7,146.9 

5,878.9 

138.9 

2,001.2 

100% 

Santander Corretora de Seguros, Investimento e Serviços S.A.

6,030.2 

3,468.5 

447.7 

100% 

Santander Brasil, Establecimiento Financiero de Credito, S.A.

5,396.3 

4,984.3 

1.9 

100% 

Atual Serviços de Recuperação de Créditos e Meios Digitais S.A.

1,760.7 

1,728.9 

58.3 

100% 

Santander Corretora de Câmbio e Valores Mobiliários S.A.

1,245.9 

715.4 

71.3 

100% 

(1) Includes balances referring to leasing portfolio and other credits. 

The financial statements of the Subsidiaries above were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, in conjunction with the CMN, Bacen rules and model of the document provided for in the Accounting Plan of Cosif Institutions, of CVM, in which they do not conflict with the rules issued by Bacen, without the elimination of transactions with related companies.

3. Corporate Restructuring

During the period ended September 30, 2020 and the year ended December 31, 2019, 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.

For additional information, see explanatory note to financial statements nº2.

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

Banco Santander's Board of Directors met and resolved:

On October 26th, 2020, to approve the Parent Company and Consolidated Condensed Interim Financial Statements of Banco Santander, prepared in accordance to the accountancy practices adopted in Brazil, applicable to the institutions authorized to operate by Bacen and Parent Company and Consolidated Condensed Interim Financial Statements prepared in accordance to the International Financial Reporting Standards (IFRS), both relative to the period ended in September, 30th, 2020.

On September 1st, 2020, to re-ratify the resolutions at the Company’s Board of Directors’ Meeting held on May 21, 2020, which dealt with the election of the members of the Company’s Audit Committee for a new term.

On August 28, 2020, to know the resignation of Mr. Rafael Bello Noya, Officer without specific designation of the Company.

On July 29,2020, approve (i) the proposal for the merger of Bosan Participações S.A. by the Company; (ii) the proposal for the merger of Banco Olé Consignado S.A. by the Company; and (iii) the call of an Extraordinary General Meeting of the Company to be held on August 31, 2020, at 3 p.m., to resolve on the following Agenda: (a) to ratify the hiring of PricewaterhouseCoopers Auditores Independentes, a specialized company responsible for preparing the corresponding appraisal reports of the Merged Companies; (b) to approve the Appraisal Reports; (c) to approve the Protocol and Justification of Bosan; (d) to approve the merger of Bosan by the Company; (e) to approve the Protocol and Justification of Banco Olé; (f) to approve the merger of Banco Olé by the Company; and (g) to authorize the managers of the Company to perform all necessary and/or convenient acts for the implementation of the Mergers.

On July 28, 2020, approve the Banco Santander Consolidated Financial Statements, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the Banco Santander Interim Consolidated Financial Statements, prepared in accordance with the International Financial Reporting Standards (IFRS), both referring to the semester ended June 30, 2020.

On July 28, 2020, to approve the proposal for declaration and payment of interest on equity, in the gross amount of R$ 770 million, for payment as of September 25, 2020, without any indexation.

On July 03, 2020, approve the election of Mr. João Marcos Pequeno De Biase as Executive Officer without specific designation of the Bank.

On June 29, 2020, approve (i) the departure of Mr. René Luiz Grande from the position of member of the Bank's Risk and Compliance Committee; and (ii) the election of Mr. René Luiz Grande to the position of member of the Bank's Audit Committee.

On June 12, 2020, approve the election of Ms. Virginie Genès-Petronilho as a member of the Bank's Risk and Compliance Committee.

On May 27, 2020, approve the amendment to the Internal Regulations of the Board of Directors, the Audit Committee and the Risks and Compliance Committee.

On May 21, 2020, approve the election of the members of the Bank's Audit Committee for a new term of officer: Ms. Deborah Stern Vieitas, Mr. Luiz Carlos Nannini and Ms. Maria Elena Cardoso Figueira.

On May 21, 2020, approve the new version of the Remuneration Policy, according to the positive recommendation of the Remuneration Committee, in compliance with of the CMN Resolution n° 3.921/2010.

On May 21, 2020, approve the local implementation of the versions presented for the Policies: (i) Social Responsibility; (ii) Social Investment, and (iii) Corporate Culture, according to the positive recommendation of the Sustainability Committee.

On April 28, 2020, approve the election of Mr. Pedro Augusto de Melo as a member and Coordinator of the Bank's Risk and Compliance Committee.

On April 27, 2020, to approve the proposal for declaration and payment of interest on equity, in the gross amount of R$ 890 million, for payment as of June 26, 2020, without any indexation.

On April 27, 2020, approve the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with the accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the consolidated Condensed Intermediate Financial Statements of Banco Santander, prepared in accordance with International Financial Reporting Standards (IFRS), both for the period ended March 31, 2020.

On April 23, 2020, (i) acknowledgment of the resignation presented by Mr. Celso Clemente Giacometti to the positions of member of the Board of Directors, Coordinator of the Nomination and Governance Committee and member of the Remuneration Committee of the Bank; (ii) approve the appointment of Mr. Álvaro Antonio Cardoso de Souza, current member of the Nomination and Governance Committee of the Bank, to the position of Coordinator of the referred Committee; (iii) approve the exoneration of Mr. Bernardo Parnes from the position of Coordinator of the Risk and Compliance Committee of the Bank; (iv) approve the appointment of Mr. Álvaro Antonio Cardoso de Souza, current member of the Risk and Compliance Committee of the Bank, to the position of Coordinator of the referred Committee; and (v) approve the exoneration of Mr. José Roberto Machado Filho, Executive Officer of the Bank.

On April 07, 2020, approve the election of Sr. Marcelo Augusto Dutra Labuto as Director with no specific designation.

On February 28, 2020, approve the resignation of Mr. Ulisses Gomes Guimarães, Director with no specific designation of the Bank; (ii) know the resignation of Mr. Gilberto Duarte de Abreu Filho, Director without a specific designation of the Bank; and (iii) approve the election of Mr. Sandro Rogério da Silva Gamba as an Officer without a specific designation of the Bank.

On February 26, 2020, approve Banco Santander Form 20-F for the year ended December 31, 2019.

On February 26, 2020, approve Banco Santander 's Consolidated Financial Statements for the year ended December 31, 2019, prepared in accordance with International Accounting Standards (IFRS).

On February 3, 2020, approve the election of Sres. Sandro Kohler Marcondes, Vítor Ohtsuki and Geraldo José Rodrigues Alckmin Neto as Directors with no specific designation.

On January 28, 2020, approve Banco Santander Individual and Consolidated Financial Statements, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen for the year ended December 31, 2019.

There was no change in corporate governance decided by the Bank for the base date of March 31, 2020. These decisions are described in the Management Report of the Individual and Consolidated Financial Statements of December 31, 2019.

 

6. Risk Management        

On February 23, 2017, Bacen published CMN Resolution No. 4,557, which provides for the structure of risk and capital management (GIRC), effective from the same year. The resolution highlights the need to implement an integrated risk and capital management structure, define an integrated stress test program and declare the Risk Appetite Statement (RAS - Risk Appetite Statement), set up a Risk Committee, define a disclosure policy of published information, appointment of director for risk management, director of capital and director responsible for information disclosure policy. Banco Santander develops necessary actions on a continuous and progressive basis, aiming at adhering to the resolution. No relevant impacts were identified as a result of this standard.

For more information, see note 25 to this publication.

Capital Management Structure

Banco Santander 's capital management structure has robust governance, which supports the processes related to this topic and establishes the responsibilities of each of the teams involved. In addition, there is a clear definition of the guidelines that must be adopted for effective capital management. Further details can be found in the Risk and Capital Management Structure, available on the Investor Relations website.

Internal Audit                     

The Internal Audit reports directly to the Board of Directors, with the Audit Committee responsible for its supervision.

Internal Audit is a permanent function and 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 systems (current or emerging) and government, thus contributing to the protection of the organization's value, solvency and reputation. The Internal Audit has a quality certificate issued by the Institute of Internal Auditors (IIA).

In order to fulfill its functions and coverage risks inherent in Banco Santander activity, Internal Audit has a set of tools developed internally and 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 latest audit rating, the degree of compliance with the recommendations and its dimension. The work programs, which describe the audit tests to be carried out, are periodically reviewed.

The Audit Committee and the Board of Directors have favorably analyzed and approved the Internal Audit work plan for 2020.

7. People

People are an essential element in the Organization. After all, they are the ones who think, design, develop, interact and build what Banco Santander wants to be. This is why the Bank invests in each of the 45,147 employees here in Brazil.

For the development of these people, the Corporate Academy - Academia Santander, works for a strong, transversal culture, providing that everyone, online and in person, can improve what they already know and explore new possibilities.

Banco Santander supports leaders and managers so that they are close and available. This performance is based on three pillars: Feedback, Open Chat and Personalized Recognition, making sure there is alignment between everyone through recurring and frank conversations, career direction and special moments to reward the growth of the teams.

Banco Santander values ​​a diverse environment, where each competence and each 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 Formations, Experiences and Generations and the LGBT + pillar. Another good example is the Talent Show, which reached its 2nd edition this year. In it, Banco Santander opens space to get to know the most different performances and explore the universe of skills that exist in the Bank, allowing interaction and fraternization among colleagues.

The result of all these actions is the high level of engagement, proven by means of two surveys that were carried out annually and which brought excellent indicators. One of them points out that at least 91% of employees say they want to stay at Banco Santander for a long time. It is believed that this satisfaction reflects positively on interactions with Customers, generating greater ties, sustainable growth and investments in Society, which leads Banco Santander to be the best Bank for all stakeholders.

Since 2007, the bank has held Santander Week, a week that aims to celebrate institutional culture and connect with the community, through initiatives that mobilize more than 45 thousand employees. In the 2020 edition, the challenges imposed by the pandemic, motivated the institution to go beyond the borders of branches and corporate buildings, inviting the entire society to participate, multiplying the effect of the annual campaign. The whole joint effort was reverted to the project “Mothers of Favela ”, of the Central Única das Favelas (CUFA), which supports mothers who are heads of families of more than 5,000 favelas across Brazil to take care of their homes and their communities. And an unprecedented action marked the end: “O Canal é Seu”, a 12-hour turnaround on more than 20 TVs, radio and portals, which took turns every 30 minutes to show a special program with artists and influencers who invited viewers to participate in the initiative.

In addition to the collection of R$ 7,226 million that will be distributed to the Mothers of the Favela in the form of a digital basic basket, days of Santander Week, part of the executive committee visited four of the institutions supported by the Bank since the beginning of the pandemic, having the opportunity to get to know more closely the impact caused by the action taken with the employees and the Heróis Usam program Masks. Bank leaders also went to CUFA branches in different regions of the country to get to know the great work done by the organization, and, once again, assumed functions in relevant areas of daily life, such as reception, cleaning, among others. 2020 was the dissemination of #efeitosantander throughout Brazil!

8. Sustainable Development         

Santander Brasil's Sustainability strategy is based on three pillars: (i) Strategic and efficient use of Environmental Resources, (ii) Development of Potentials and (iii) Resilient and Inclusive Economy. The Bank's vision, through these pillars, is to contribute to a better, more prosperous and fair society, maintaining excellence and responsibility in internal management, with ethical values ​​as the basis and technology at the service of people and businesses.

In relation to the Social and Environmental Business, Santander in the third quarter: i) participated in the issuance of Suzano's Sustainable Linked-Bond in the amount of $ 750 million. This was the second operation carried out in the world of Sustainable Linked-Bond, which is a new international debt instrument in which a company raises funds linked to the achievement of environmental goals; ii) launched a R$ 5 billion line to support water supply, sewage collection and treatment and storm drainage initiatives; iii) acted as bookkeeper and intermediary for Oleoplan's CBios, which is one of the first biodiesel companies to sell decarbonization credits; and iv) in partnership with two other private pairs, presented an integrated plan with the objective of effectively contributing to the sustainable development of the Amazonia.

In 2020, Santander Brasil received updates on its performance in the rating of ESG Agencies (environmental, social and governance). It remains in Vigeo Eiris' ranking of 'Best Emerging Market Performers'; received improvements in its score in the analysis of FTSE4Good, being above the average of the sector (Banks), of the industry (financial) and also of the average of the Brazilian companies; and in relation to MSCI, it remains AA (on a AAA-CCC scale), being above the industry average in almost all dimensions.

As a result of the global health crisis scenario, Banco Santander has been promoting actions to support customers and society. One of these actions includes supporting five institutions that are working on the front lines in the fight against Covid-19. More than R$ 7 million was raised, half of the amounts donated by employees and the other half doubled by the Bank. Other actions can be seen on the Santander website, through the link https://www.santander.com.br/camivais/cuidar.

9. Independent Audit

The policy of Banco Santander, including its subsidiaries, in contracting services not related to the auditing of the Financial Statements by its independent auditors, is based on Brazilian and international auditing standards, which preserve the auditor's independence. This reasoning provides for the following: (i) the auditor must not audit his own work, (ii) the auditor must not exercise managerial functions in his client, (iii) the auditor must not promote his client's interests, and (iv ) the need for approval of any services by the Bank's Audit Committee.

In compliance with CVM Instruction 381/2003, Banco Santander informs that in the period ended September 30, 2020, PricewaterhouseCoopers did not provide services unrelated to the independent auditing of the Financial Statements of Banco Santander and controlled companies over 5% of the total fees related to independent audit services.

In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls in place to ensure its independence, which include assessing the work performed, covering any service other than an independent audit of the Financial Statements of Banco Santander and its subsidiaries. This assessment is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and provision of professional services not related to the auditing of the Financial Statements by its independent auditors during the period ended September 30, 2020, did not affect the independence and objectivity in conducting the external audit exams carried out at Banco Santander and other entities of the Group, since the above principles were observed.

The Board of Directors

The Executive Board

(Authorized at the Board of Directors' Meeting of 26/10/2020)

 

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Balance Sheet

Bank

Consolidated

Notes

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Current Assets

593,561,170 

496,060,072 

581,102,464 

514,863,901 

Cash

15,148,271 

9,543,649 

15,338,105 

9,924,644 

Interbank Investments

106,211,134 

82,235,455 

57,443,333 

42,571,395 

Money Market Investments

49,257,048 

28,703,365 

49,014,764 

28,703,365 

Interbank Deposits

53,072,218 

43,230,118 

4,546,701 

3,565,203 

Foreign Currency Investments

3,881,868 

10,301,972 

3,881,868 

10,302,827 

Securities and Derivative Financial Instruments

101,728,420 

61,649,371 

108,565,496 

72,160,634 

Own Portfolio

59,759,611 

27,746,398 

70,290,158 

34,097,174 

Subject to Repurchase Commitments

13,430,200 

26,824,877 

9,040,074 

21,338,877 

Derivative Financial Instruments

22,864,509 

2,653,751 

21,083,856 

8,894,341 

Deposited in the Central Bank

10,032 

10,032 

Privatization Currencies

575 

512 

575 

512 

Pledged in Guarantees

2,051,933 

456,012 

4,529,241 

3,861,909 

Securities Obtained from Commitments with Free Mover

3,611,560 

3,967,821 

3,611,560 

3,967,821 

Interbank Accounts

72,742,638 

78,178,662 

84,794,375 

88,952,546 

Payments and Receipts Pending Settlement

16,561,502 

9,027,921 

28,397,623 

19,267,302 

Restricted Deposits:

56,163,378 

69,121,251 

56,383,554 

69,663,608 

Central Bank Deposits

56,159,317 

69,121,095 

56,379,493 

69,663,452 

National Housing System (SFH)

4,061 

156 

4,061 

156 

Interbank Transfers

4,560 

7,854 

Correspondents

13,198 

21,636 

13,198 

21,636 

Lending Operations

128,554,076 

83,319,998 

135,661,554 

112,150,045 

Public Sector

38,391 

153,586 

38,391 

153,586 

Private Sector

133,370,831 

86,455,503 

141,670,749 

116,405,810 

(Allowance for Loan Losses)

8.e

(4,855,146) 

(3,289,091) 

(6,047,586) 

(4,409,351) 

Leasing Operations

856,779 

1,202,645 

Private Sector

869,850 

1,216,238 

(Allowance for Lease Losses)

8.e

(13,071) 

(13,593) 

Other Receivables

167,391,354 

179,592,907 

176,359,990 

185,981,022 

Credits for Avals and Sureties Honored

77,829 

23,283 

81,078 

377,915 

Foreign Exchange Portfolio

115,703,610 

123,396,135 

115,703,610 

123,396,135 

Income Receivable

1,856,438 

2,226,778 

1,741,894 

2,025,186 

Trading Account

4,289,856 

2,325,866 

7,538,166 

3,912,093 

Others

10 

46,363,626 

52,071,971 

52,190,676 

56,713,037 

(Allowance for Other Receivables Losses)

8.e

(900,005) 

(451,126) 

(895,434) 

(443,344) 

Other Assets

1,785,277 

1,540,030 

2,082,832 

1,920,970 

Other Assets

1,113,616 

1,195,777 

1,417,772 

1,524,102 

(Allowance for Valuation)

(102,809) 

(115,705) 

(231,132) 

(254,950) 

Prepaid Expenses

774,470 

459,958 

896,192 

651,818 

 


 

 Bank

 Consolidated

Notes

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Long-Term Assets

351,896,307 

305,377,691 

387,418,027 

329,430,790 

Interbank Investments

28,359,805 

33,694,075 

1,956,747 

796,099 

Interbank Deposits

28,359,805 

33,694,075 

1,956,747 

796,099 

Securities and Derivative Financial Instruments

133,306,660 

112,305,951 

140,766,205 

121,294,033 

Own Portfolio

37,320,267 

23,603,436 

38,440,927 

28,228,324 

Subject to Repurchase Commitments

63,122,355 

71,638,459 

63,122,355 

71,617,304 

Derivative Financial Instruments

13,987,501 

8,532,484 

13,990,973 

8,546,799 

Deposited with the Central Bank

1,943,159 

1,943,159 

Privatization Currencies

370 

370 

Pledged in Guarantees

10,498,955 

8,028,432 

16,834,368 

12,398,466 

Securities Obtained from Commitments with Free Mover

6,434,423 

502,770 

6,434,423 

502,770 

Interbank Accounts

350,966 

312,411 

350,966 

312,411 

Restricted Deposits:

350,966 

312,411 

350,966 

312,411 

National Housing System (SFH)

350,966 

312,411 

350,966 

312,411 

Lending Operations

127,018,621 

110,094,019 

172,691,874 

148,292,513 

Public Sector

1,001,305 

964,378 

1,002,572 

965,758 

Private Sector

141,786,574 

123,678,363 

189,097,754 

163,374,180 

(Allowance for Loan Losses)

8.e

(15,769,258) 

(14,548,722) 

(17,408,452) 

(16,047,425) 

Leasing Operations

1,562,273 

1,564,446 

Public Sector

1,119 

Private Sector

1,583,493 

1,583,641 

(Allowance for Lease Losses)

8.e

(21,220) 

(20,314) 

Other Receivables

62,575,878 

48,661,212 

69,802,788 

56,678,875 

Receivables for Guarantees Honored

513,630 

298,195 

413,020 

298,195 

Foreign Exchange Portfolio

835,042 

1,108,978 

835,042 

1,108,978 

Income Receivable

252,491 

156,939 

252,491 

156,939 

Trading and Intermediation of Values

562,425 

Deferred Taxes

41,709,608 

28,074,411 

45,893,743 

31,904,371 

Others

10 

19,794,648 

19,395,717 

23,023,403 

23,122,032 

(Allowance for Other Receivables Losses)

8.e

(529,541) 

(373,028) 

(614,911) 

(474,065) 

Other Assets

284,377 

310,023 

287,174 

492,413 

Temporary Assets

1,444 

1,622 

1,450 

56,875 

(Allowance for Losses)

(1,444) 

(1,622) 

(1,449) 

(1,630) 

Prepaid Expenses

284,377 

310,023 

287,173 

437,168 

Permanent Assets

39,804,164 

37,097,964 

13,698,120 

13,248,376 

Investments

27,752,568 

26,831,540 

381,957 

354,490 

Investments in Affiliates and Subsidiaries:

12 

27,731,674 

26,810,793 

361,009 

333,674 

Domestic

22,747,394 

23,263,738 

361,009 

333,674 

Foreign

4,984,280 

3,547,055 

Other Investments

45,211 

45,064 

50,470 

50,344 

(Allowance for Losses)

(24,317) 

(24,317) 

(29,522) 

(29,528) 

Fixed Assets

6,081,278 

6,214,168 

6,986,615 

7,181,088 

Real Estate in Use

2,449,971 

2,467,216 

2,753,700 

2,753,149 

Others Fixed Assets

12,225,494 

13,818,040 

13,942,297 

15,483,559 

(Accumulated Depreciation)

(8,594,187) 

(10,071,088) 

(9,709,382) 

(11,055,620) 

Intangible Assets

13 

5,970,318 

4,052,256 

6,329,548 

5,712,798 

Goodwill

28,323,672 

26,496,592 

29,513,388 

29,050,911 

Others Intangible Assets

9,291,408 

8,485,328 

9,958,217 

9,196,813 

(Accumulated Amortization)

(31,644,762) 

(30,929,664) 

(33,142,057) 

(32,534,926) 

Total Assets

985,261,641 

838,535,727 

982,218,611 

857,543,067 

 


 

 Bank

 Consolidated

Notes

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Current Liabilities

665,841,911 

594,642,669 

648,605,973 

598,591,332 

Deposits

14 

291,782,765 

214,983,542 

287,970,117 

212,838,421 

Demand Deposits

43,591,258 

29,392,188 

43,413,922 

29,107,534 

Savings Deposits

59,443,489 

49,039,857 

59,443,489 

49,039,857 

Interbank Deposits

6,541,643 

4,573,086 

4,369,529 

3,457,996 

Time Deposits

182,206,372 

131,978,411 

180,743,174 

131,096,194 

Other Deposits

136,840 

Money Market Funding

14 

97,312,675 

111,939,869 

90,508,089 

106,248,412 

Own Portfolio

75,524,155 

97,227,938 

70,719,562 

91,536,480 

Third Parties

7,499,974 

8,743,348 

5,499,981 

8,743,348 

Linked to Trading Portfolio Operations

14,288,546 

5,968,583 

14,288,546 

5,968,584 

Funds from Acceptance and Issuance of Securities

14 

50,659,509 

60,517,226 

30,720,698 

51,265,094 

Exchange Acceptances

100,862 

378,717 

34,240 

Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes

26,658,655 

42,445,229 

28,353,878 

43,567,117 

Funding by Structured Operations Certificates

22,203,088 

16,295,922 

291,199 

5,887,662 

Interbank Accounts

1,696,904 

1,776,075 

1,696,904 

1,776,075 

Receipts and Payments Pending Settlement

2,187,781 

41,756 

2,508,208 

369,578 

Interbank Transfers

2,031,853 

2,352,280 

327,822 

Interbank Accounts

155,928 

41,756 

155,928 

41,756 

Third-Party Funds in Transit

4,162,043 

4,019,119 

4,162,043 

4,019,119 

Internal Transfers of Assets

4,165,680 

4,002,824 

4,165,680 

4,002,824 

Borrowings

(3,637) 

16,295 

(3,637) 

16,295 

Local Borrowings - Other Institutions

14 

59,241,154 

43,870,657 

54,491,052 

41,322,712 

Foreign Borrowings

11,402 

33,585 

Domestic Onlendings - Official Institutions

59,241,154 

43,870,657 

54,479,650 

41,289,127 

National Economic and Social Development Bank (BNDES)

14 

4,499,065 

3,697,638 

4,499,065 

3,697,638 

Federal Savings and Loan Bank (CEF)

2,519,074 

1,355,447 

2,519,074 

1,355,447 

National Equipment Financing Authority (FINAME)

86,657 

94,725 

86,657 

94,725 

Other Institutions

1,627,158 

1,755,646 

1,627,158 

1,755,646 

Derivative Financial Instruments

266,176 

491,820 

266,176 

491,820 

Derivative Financial Instruments

19,676,565 

3,774,395 

18,636,233 

10,112,463 

Instrumentos Financeiros Derivativos

19,676,565 

3,774,395 

18,636,233 

10,112,463 

Other Payables

136,320,354 

151,798,467 

155,109,468 

168,717,895 

Collected Taxes and Other

1,857,054 

96,928 

1,859,240 

131,179 

Foreign Exchange Portfolio

108,075,113 

116,991,021 

108,075,113 

116,991,021 

Social and Statutory

248,769 

8,188,762 

120,636 

8,376,961 

Tax and Social Security

1,997,614 

2,854,815 

3,402,577 

4,092,434 

Trading Account

280,492 

1,063,403 

2,916,765 

3,149,991 

Debt Instruments Eligible to Compose Capital

15 

239,171 

170,939 

239,171 

170,939 

Others

16 

23,622,141 

22,432,599 

38,495,966 

35,805,370 


 

 Bank

 Consolidated

Notes

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Long-Term Liabilities

242,194,120 

173,943,594 

255,115,976 

187,197,923 

Deposits

14 

95,426,259 

59,228,624 

96,247,800 

60,089,570 

Interbank Deposits

262,189 

100,686 

1,741,572 

841,294 

Time Deposits

95,164,070 

59,127,938 

94,506,228 

59,248,276 

Money Market Funding

14 

28,655,042 

17,692,578 

28,655,042 

17,692,578 

Own Portfolio

246,538 

159,745 

246,538 

159,745 

Linked to Trading Portfolio Operations

28,408,504 

17,532,833 

28,408,504 

17,532,833 

Funds from Acceptance and Issuance of Securities

14 

40,433,586 

31,062,142 

42,828,468 

34,697,521 

Exchange Acceptances

746,504 

1,557,513 

Real Estate Credit Notes, Mortgage Notes,  Credit and Similar Notes

30,431,679 

26,271,049 

32,080,057 

28,644,786 

Securities Issued Abroad

9,062,608 

3,123,591 

9,062,608 

2,827,720 

Funding by Structured Operations Certificates

939,299 

1,667,502 

939,299 

1,667,502 

Borrowings

14 

1,330,307 

1,788,469 

1,362,034 

1,802,272 

Local Borrowings - Other Institutions

31,727 

13,803 

Foreign Borrowings

1,330,307 

1,788,469 

1,330,307 

1,788,469 

Domestic Onlendings - Official Institutions

14 

7,856,379 

8,056,939 

7,856,379 

8,056,939 

National Economic and Social Development Bank (BNDES)

4,895,312 

4,897,785 

4,895,312 

4,897,785 

Federal Savings and Loan Bank (CEF)

61,712 

68,325 

61,712 

68,325 

National Equipment Financing Authority (FINAME)

2,899,355 

3,063,173 

2,899,355 

3,063,173 

Other Institutions

27,656 

27,656 

Derivative Financial Instruments

19,747,449 

10,208,817 

19,884,721 

10,510,899 

Derivative Financial Instruments

19,747,449 

10,208,817 

19,884,721 

10,510,899 

Other Payables

48,745,098 

45,906,025 

58,281,532 

54,348,144 

Foreign Exchange Portfolio

920,717 

1,004,861 

920,717 

1,004,861 

Tax and Social Security

3,026,582 

3,659,656 

3,579,575 

4,199,423 

Trading Account

10,842 

978,331 

557,370 

Debt Instruments Eligible to Compose Capital

15 

14,234,562 

10,005,022 

14,234,562 

10,005,022 

Others

16 

30,552,395 

31,236,486 

38,568,347 

38,581,468 

Deferred Income

347,380 

261,741 

577,288 

285,219 

Deferred Income

347,380 

261,741 

577,288 

285,219 

Stockholders' Equity

18 

76,878,230 

69,687,723 

76,765,897 

69,773,232 

Capital:

57,000,000 

57,000,000 

57,000,000 

57,000,000 

Brazilian Residents

4,808,186 

4,808,186 

4,808,186 

4,808,186 

Foreign Residents

52,191,814 

52,191,814 

52,191,814 

52,191,814 

Capital Reserves

201,358 

197,369 

198,648 

194,115 

Profit Reserves

17,962,614 

12,909,736 

17,962,609 

12,986,778 

Adjustment to Fair Value

(468,065) 

261,753 

(468,488) 

273,474 

Retained Earnings

2,973,927 

2,864,732 

(-) Treasury Shares

(791,604) 

(681,135) 

(791,604) 

(681,135) 

Non Controlling Interest

18.e

1,154,477 

1,695,361 

Total Stockholders' Equity

76,878,230 

69,687,723 

77,920,374 

71,468,593 

Total Liabilities

985,261,641 

838,535,727 

982,218,611 

857,543,067 

The accompanying notes from Management are an integral part of these financial statements.

 


 


Income Statements

Bank

Consolidated

Notes

07/01 to 09/30/2020

01/01 to 09/30/2020

07/01 to 09/30/2019

01/01 to 09/30/2019

07/01 to 09/30/2020

01/01 to 09/30/2020

07/01 to 09/30/2019

01/01 to 09/30/2019

Income Related to Financial Operations

19,386,106 

93,353,547 

26,356,017 

61,342,105 

21,783,259 

101,346,732 

28,080,448 

67,691,863 

Loan Operations

10,526,199 

38,535,232 

12,462,860 

32,536,043 

12,980,453 

47,472,382 

15,834,012 

42,104,483 

Leasing Operations

72,546 

228,806 

97,691 

268,767 

Securities Transactions

6.a

8,513,306 

59,087,304 

13,609,377 

26,774,837 

8,105,609 

57,308,001 

12,522,803 

24,116,050 

Derivatives Transactions

(385,544) 

132,585 

499,263 

(2,527,128) 

(116,702) 

594,967 

(85,598) 

(3,376,027) 

Foreign Exchange Operations

456,715 

(5,688,877) 

(1,238,344) 

1,520,348 

464,997 

(5,552,342) 

(1,318,344) 

1,520,359 

Compulsory Deposits

275,430 

1,287,303 

1,022,861 

3,038,005 

276,356 

1,294,918 

1,029,884 

3,058,231 

Expenses on Financial Operations

(13,122,853)

(90,733,774)

(21,720,758)

(42,546,730)

(14,493,701)

(94,402,806)

(22,252,860)

(44,120,576)

Funding Operations Market

14.b

(6,575,702) 

(47,194,837) 

(12,725,666) 

(26,850,322) 

(6,863,436) 

(48,057,294) 

(12,580,161) 

(26,630,738) 

Borrowings and Onlendings Operations

(4,357,124) 

(31,685,845) 

(6,096,422) 

(7,578,326) 

(4,364,171) 

(31,711,186) 

(6,096,154) 

(7,523,008) 

Operations of Sale or Transfer of Financial Assets

(127,500) 

(1,133,182) 

(232,717) 

(250,100) 

(127,419) 

(1,133,050) 

(238,419) 

(270,110) 

Allowance for Loan Losses

8.f

(2,062,527) 

(10,719,910) 

(2,665,953) 

(7,867,982) 

(3,138,675) 

(13,501,276) 

(3,338,126) 

(9,696,720) 

Gross Income Related to Financial Operations

6,263,253 

2,619,773 

4,635,259 

18,795,375 

7,289,558 

6,943,926 

5,827,588 

23,571,287 

Other Operating Revenues (Expenses)

(2,094,609)

(5,877,046)

(2,106,982)

(6,124,649)

(2,595,842)

(8,716,555)

(2,938,387)

(9,302,714)

Banking Service Fees

20 

2,436,799 

6,931,602 

2,603,074 

7,644,646 

3,378,682 

9,505,816 

3,477,828 

10,125,119 

Income Related to Bank Charges

20 

1,179,680 

3,342,170 

1,100,711 

3,270,334 

1,367,662 

3,824,873 

1,272,477 

3,756,404 

Personnel Expenses

21 

(1,574,942) 

(4,717,291) 

(1,678,535) 

(4,964,279) 

(1,798,394) 

(5,420,020) 

(1,914,707) 

(5,652,150) 

Other Administrative Expenses

22 

(2,872,688) 

(8,152,541) 

(2,534,452) 

(7,476,974) 

(3,210,003) 

(9,343,485) 

(2,969,745) 

(8,787,796) 

Tax Expenses

(727,066) 

(1,446,072) 

(640,769) 

(2,233,671) 

(995,847) 

(2,290,771) 

(893,022) 

(3,219,081) 

Investments in Affiliates and Subsidiaries

12 

415,040 

2,237,263 

551,371 

2,160,418 

15,393 

24,941 

13,389 

35,109 

Other Operating Revenues

23 

1,134,249 

3,467,480 

1,366,509 

2,591,491 

1,515,853 

4,694,826 

1,698,682 

3,324,679 

Other Operating Expenses

24 

(2,085,681) 

(7,539,657) 

(2,874,891) 

(7,116,614) 

(2,869,188) 

(9,712,735) 

(3,623,289) 

(8,884,998) 

Operating Income

4,168,644 

(3,257,273)

2,528,277 

12,670,726 

4,693,716 

(1,772,629)

2,889,201 

14,268,573 

Non-Operating Income

25 

22,098 

252,928 

8,468 

23,064 

15,872 

252,455 

18,850 

(92,532)

Income Before Taxes on Income and Profit Sharing

4,190,742 

(3,004,345)

2,536,745 

12,693,790 

4,709,588 

(1,520,174)

2,908,051 

14,176,041 

Income Tax and Social Contribution

(35,484)

13,982,731 

1,517,689 

(926,031)

(412,625)

12,653,247 

1,258,960 

(2,077,432)

Provision for Income Tax

398,487 

24,643 

978,198 

(301,343) 

(16,567) 

(1,143,051) 

730,101 

(1,385,424) 

Provision for Social Contribution Tax

300,355 

(26,685) 

600,425 

(169,240) 

81,910 

(662,310) 

506,318 

(645,032) 

Deferred Tax Credits

(734,326) 

13,984,773 

(60,934) 

(455,448) 

(477,968) 

14,458,608 

22,541 

(46,976) 

Profit Sharing

(411,331)

(1,291,581)

(420,685)

(1,262,363)

(457,730)

(1,421,238)

(469,896)

(1,395,158)

Non Controlling Interest

18.e

(28,084) 

(101,124) 

(89,412) 

(270,575) 

Net Income

3,743,927 

9,686,805 

3,633,749 

10,505,396 

3,811,149 

9,610,711 

3,607,703 

10,432,876 

Number of Shares (Thousands)

18.a

7,498,531 

7,498,531 

7,498,531 

7,498,531 

$)

499.29 

1,291.83 

484.59 

1,400.99 

 


 


Comprehensive Income Statements

 

Bank

Consolidated

01/01 to 09/30/2020

01/01 to 09/30/2019

01/01 to 09/30/2020

01/01 to 09/30/2019

Profit for the Period

9,686,805 

10,505,396 

9,610,711 

10,432,876 

Other Comprehensive Income that will be subsequently reclassified for profit or loss when specific conditions are met:

(1,395,856)

2,036,942 

(1,408,052)

2,040,810 

Available-for-sale financial assets

(1,205,187) 

2,085,933 

(1,217,383) 

2,084,619 

Available-for-sale financial assets

(2,485,316) 

3,557,354 

(2,497,827) 

3,556,040 

Income taxes

1,280,129 

(1,471,421) 

1,280,444 

(1,471,421) 

Cash flow hedges

(190,669) 

(48,991) 

(190,669) 

(43,809) 

Cash flow hedges

(106,742) 

74,775 

(106,742) 

77,876 

Income taxes

(83,927) 

(123,766) 

(83,927) 

(121,685) 

Other Comprehensive Income that won't be reclassified for Net income:

666,091 

(811,155)

666,091 

(811,155)

Defined Benefits plan

666,091 

(811,155) 

666,091 

(811,155) 

Defined Benefits plan

1,278,431 

(1,305,655) 

1,278,431 

(1,305,655) 

Income taxes

(612,340) 

494,500 

(612,340) 

494,500 

Comprehensive Income for the Period

8,957,040 

11,731,183 

8,868,750 

11,662,531 

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 Retained

(-)Treasury Shares

Total

Balances as of December 31, 2018

57,000,000 

140,707 

3,113,605 

6,506,949 

1,885,972 

114,491 

(3,071,043)

(461,432)

65,229,249 

Employee Benefit Plans

(811,155) 

(811,155) 

Treasury Shares

(178,240) 

(178,240) 

Emission Costs of Treasury Shares

(1,527) 

(1,527) 

Result of Treasury Shares

4,221 

4,221 

Reservations for Share - Based Payment

  

(36,643) 

(36,643) 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

  

2,068,491 

(31,549) 

2,036,942 

Net Income

10,505,396 

10,505,396 

Allocations:

Legal Reserve

 18,c

343,582 

(343,582) 

Interest on Capital

 18,b

(3,000,000) 

(3,000,000) 

Reserve for Dividend Equalization

 18,c

4,528,755 

(4,528,755) 

Others

 18,c

690 

690 

Balances as of September 30, 2019

57,000,000 

108,285 

3,457,187 

11,035,704 

3,954,463 

82,942 

(3,882,198)

2,633,749 

(641,199)

73,748,933 

Changes in the Period

(32,422)

343,582 

4,528,755 

2,068,491 

(31,549)

(811,155)

2,633,749 

(179,767)

8,519,684 

Balances as of December 31, 2019

  

57,000,000 

197,369 

3,818,064 

9,091,672 

3,920,714 

91,380 

(3,750,341)

(681,135)

69,687,723 

Employee Benefit Plans

666,090 

666,090 

Treasury Shares

 

 

(110,469) 

(110,469) 

Income with Treasury Shares

18,d

 

 

(15,476) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,476) 

Reservations for Share - Based Payment

  

19,465 

19,465 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

  

(1,387,736) 

(8,172) 

(1,395,908) 

Net Income

9,686,805 

9,686,805 

Allocations:

Legal Reserve

 18,c

297,144 

(297,144) 

Interest on Capital

 18,b

(1,660,000) 

(1,660,000) 

Reserve for Dividend Equalization

 18,c

4,755,734 

(4,755,734) 

Balances as of September 30, 2020

57,000,000 

201,358 

4,115,208 

13,847,406 

2,532,978 

83,208 

(3,084,251)

2,973,927 

(791,604)

76,878,230 

Changes in the Period

3,989 

297,144 

4,755,734 

(1,387,736)

(8,172)

666,090 

2,973,927 

(110,469)

7,190,507 

 


Statements of Changes in Stockholders' Equity – Consolidated

Reservas de Lucros

 Ajustes de Avaliação Patrimonial

Notes

Capital

Capital Reserves

Legal Reserve

Reserve for Dividend Equalization

Own Position

Affiliates and Subsidiaries

Others Adjustment to Fair Value

Retained  Earnings Retained

(-)Treasury Shares

Stockholders' Equity

Minority  Interest

Total Stockholders' Equity

Balances as of December 31, 2018

57,000,000 

142,414 

3,113,606 

6,509,735 

1,885,972 

114,491 

(3,071,043)

(461,432)

65,233,743 

2,069,929 

67,303,672 

Employee Benefit Plans

Treasury Shares

(811,155) 

(178,240) 

(989,395) 

(989,395) 

Result of Treasury Shares

4,221 

4,221 

4,221 

Reservations for Share - Based Payment

  

(39,914) 

(39,914) 

(39,914) 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

2,068,491 

(31,549) 

2,036,942 

2,036,942 

 

Capital Restructuring

(1,527) 

(1,527) 

(1,527) 

Net Income

10,432,876 

10,432,876 

10,432,876 

Allocations:

Legal Reserve

 18,c

343,582 

(343,582) 

Dividends

 18,b

Provision of Interest on Capital

 18,b

(3,000,000) 

(3,000,000) 

(3,000,000) 

Reserve for Dividend Equalization

 18,c

4,528,755 

(4,528,755) 

Unrealized Profit

(2,787) 

3,869 

4,374 

5,456 

5,456 

Non Controlling Interest Results

 18,e

270,575 

270,575 

Others

690 

690 

(531,560) 

(530,870) 

Balances as of September 30, 2019

57,000,000 

106,721 

3,457,188 

11,035,703 

3,954,463 

86,811 

(3,882,198)

2,565,603 

(641,199)

73,683,092 

1,808,944 

75,492,036 

 

Changes in the Period

(35,693)

343,582 

4,525,968 

2,068,491 

(27,680)

(811,155)

2,565,603 

(179,767)

8,449,349 

(260,985)

8,188,364 

 


 

Reservas de Lucros

 Ajustes de Avaliação Patrimonial

Notes

Capital

Capital Reserves

Legal Reserve

Reserve for Dividend Equalization

Own Position

Affiliates and Subsidiaries

Others Adjustment to Fair Value

Retained  Earnings Retained

(-)Treasury Shares

Stockholders' Equity

Minority  Interest

Total Stockholders' Equity

Balances as of December 31, 2019

  

57,000,000 

194,115 

3,818,065 

9,168,713 

3,932,436 

91,380 

(3,750,342)

(681,135)

69,773,232 

1,695,361 

71,468,593 

Employee Benefit Plans

666,090 

666,090 

666,090 

Treasury Shares

(15,476) 

(110,469) 

(125,945) 

(125,945) 

Reservations for Share - Based Payment

  

20,009 

20,009 

20,009 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

(1,399,879) 

(8,173) 

(1,408,052) 

(1,408,052) 

Net Income

9,610,711 

9,610,711 

9,610,711 

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal Reserve

 18,c

 

 

 

297,144 

 

 

 

 

 

(297,144) 

 

 

 

 

Dividends

 18,b

 

 

 

 

 

 

 

 

 

 

 

 

Provision of Interest on Capital

 18,b

 

 

 

 

 

 

 

 

(1,660,000) 

 

 

(1,660,000) 

 

 

(1,660,000) 

Reserve for Dividend Equalization

 18,c

 

 

 

 

4,755,734 

 

 

 

 

(4,755,734) 

 

 

 

 

Unrealized Profit

33,101 

(33,101) 

 

Non Controlling Interest Results

 18,e

(101,124) 

(101,124) 

Others

(110,148) 

(110,148) 

(439,760) 

(549,908) 

Balances as of September 30, 2020

57,000,000 

198,648 

4,115,209 

13,847,400 

2,532,557 

83,207 

(3,084,252)

2,864,732 

(791,604)

76,765,897 

1,154,477 

77,920,374 

Changes in the Period

4,533 

297,144 

4,678,687 

(1,399,879)

(8,173)

666,090 

2,864,732 

(110,469)

6,992,665 

(540,884)

6,451,781 

 


Cash Flows Statements

 

Bank

Consolidated

 

01/01 to 09/30/2020

01/01 to 09/30/2019

01/01 to 09/30/2020

01/01 to 09/30/2019

 

Notes

 

Operational Activities

 

Net Income

9,686,805 

10,505,396 

9,610,711 

10,432,876 

 

Adjustment to Net Income

(37,970,632)

7,141,184 

(30,501,456)

11,720,599 

 

Allowance for Loan Losses

8,e

10,719,910 

7,867,982 

13,501,276 

9,696,720 

 

Provision for Legal Proceedings and Administrative and Legal Obligations

17,c

983,547 

1,295,035 

1,123,110 

1,508,142 

 

Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations

17,c

248,060 

370,446 

286,499 

451,606 

 

Deferred Tax Credits and Liabilities

(14,127,896) 

35,969 

(13,498,737) 

(377,901) 

 

Equity in Affiliates and Subsidiaries

12 

(2,237,263) 

(2,160,418) 

(24,941) 

(35,109) 

 

Depreciation and Amortization

22 

1,937,155 

1,639,284 

2,285,648 

2,053,665 

 

Recognition (Reversal) Allowance for Other Assets Losses

25 

(13,027) 

(11,417) 

(23,742) 

92,223 

 

Gain (Loss) on Sale of Other Assets

25 

(45,888) 

(1,273) 

(35,406) 

14,319 

 

Gain (Loss) on Sale of Investments

25 

(168,588) 

(168,588) 

(6,268) 

 

Provision for Financial Guarantees

23 

(7,327) 

(36,294) 

(7,327) 

(36,294) 

 

Monetary Adjustment of Escrow Deposits

23 

(203,662) 

(387,814) 

(235,032) 

(449,123) 

 

Recoverable Taxes

23 

(112,621) 

(50,745) 

(133,143) 

(76,725) 

 

Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents

2,295 

(507) 

2,295 

(507) 

 

Effects of Changes in Foreign Exchange Rates on Assets and Liabilities

(33,634,412) 

(1,371,336) 

(33,634,412) 

(1,371,336) 

 

Others

(1,310,923) 

(47,728) 

61,045 

257,187 

 

Changes on Assets and Liabilities

57,257,695 

(13,104,291)

63,710,307 

(12,914,457)

 

Decrease (Increase) in Interbank Investments

(15,004,827) 

6,733,285 

(12,664,808) 

13,445,445 

 

Decrease (Increase) in Securities and Derivative Financial Instruments

(35,460,745) 

(13,242,111) 

(38,646,586) 

(13,571,648) 

 

Decrease (Increase) in Lending and Leasing Operations

(72,538,909) 

(25,910,231) 

(60,986,124) 

(34,063,300) 

 

Decrease (Increase) in Deposits on Central Bank of Brazil

12,961,778 

(1,155,809) 

13,283,959 

(1,187,434) 

 

Decrease (Increase) in Other Receivables

(668,010) 

(8,795,399) 

(1,438,278) 

(10,017,083) 

 

Decrease (Increase) in Other Assets

(288,866) 

173,312 

(94,379) 

149,521 

 

Net Change on Other Interbank and Interbranch Accounts

(5,275,360) 

1,506,157 

(6,882,789) 

5,056,671 

 

Increase (Decrease) in Deposits

112,996,858 

2,075,408 

111,289,926 

6,036,734 

 

Increase (Decrease) in Money Market Funding

(3,664,730) 

(8,926,561) 

(4,777,859) 

(9,181,124) 

 

Increase (Decrease) in Borrowings

11,421,142 

18,704,113 

9,236,909 

17,900,148 

 

Increase (Decrease) in Other Liabilities

52,693,725 

17,256,065 

55,488,250 

15,477,926 

 

Increase (Decrease) in Change in Deferred Income

85,639 

(17,991) 

292,069 

(59,878) 

 

Income Tax Recovered/(Paid)

(1,504,529) 

(389,983) 

(2,900,435) 

 

Net Cash Provided by (Used in) Operational Activities

28,973,868 

4,542,289 

42,819,564 

9,239,018 

 

Investing Activities

 

Increase in Equity at Affiliates and Subsidiaries

12 

(499,000) 

(2,046,249) 

 

Purchase of Investment

 

(147) 

 

 

(130) 

 

 

Purchase of Fixed Assets

(867,288) 

(989,974) 

(986,175) 

(1,417,067) 

 

Purchase of Intangible Assets

(2,984,433) 

(1,063,209) 

(1,547,010) 

(1,182,294) 

 

Net Cash Received on Sale/Reduction of Investments

6,699 

 

Acquisition of Minority Residual Interest in Subsidiary

2,c

(1,601,100) 

(1,291,630) 

(1,606,000) 

(1,292,630) 

 

Proceeds from Assets not in Use

445,709 

453,236 

461,053 

479,934 

 

Proceeds from Property for Own Use

84,269 

30,309 

49,059 

45,036 

 

Proceeds from Affiliates and Subsidiaries

3,066,644 

7,254 

171,213 

7,254 

 

Dividends and Interest on Capital Received

1,293,445 

1,270,187 

(5,165) 

55,210 

 

Net Cash Provided by (Used in) Investing Activities

(1,061,893)

(3,630,076)

(3,463,151)

(3,343,102)

 

Financing Activities

 

Purchase of Own Share

18,d

(110,469) 

(178,240) 

(110,469) 

(178,240) 

 

Issuance of Long - Term Emissions

57,025,095 

46,700,608 

46,517,680 

43,827,040 

 

Long - Term Payments

(67,167,344) 

(39,609,511) 

(68,707,700) 

(41,408,783) 

 

Subordinated Debts - Payments

(9,924,747) 

(9,924,747) 

 

Debt Instruments Eligible to Compose Capital - Payments

 

 

(328,892) 

 

 

(328,892) 

 

Dividends and Interest on Capital Paid

(8,415,750) 

(6,039,908) 

(8,283,747) 

(6,168,340) 

 

Increase (decrease) in Minority Interest

(310,294) 

 

Capital Increase in Controlled Companies Held by Minority Interest

12 

100,000 

 

Net Cash Provided by (Used in) Financing Activities

(18,668,468)

(9,380,690)

(30,584,236)

(14,392,256)

 

Exchange Variation on Cash and Cash Equivalents

(2,295)

507 

(2,295)

507 

 

Increase (Decrease) in Cash and Cash Equivalents

9,243,499 

(8,467,970)

8,772,177 

(8,495,833)

 

Cash and Cash Equivalents at the Beginning of Period

21,421,432 

25,854,948 

21,443,663 

25,285,982 

 

Cash and Cash Equivalents at the End of Period

30,662,636 

17,386,978 

30,213,546 

16,790,149 

 


Statements of Value Added

Bank

Consolidated

01/01 to 09/30/2020

01/01 to 09/30/2019

01/01 to 09/30/2020

01/01 to 09/30/2019

Notes

Income Related to Financial Operations

93,353,547 

61,342,105 

101,346,732 

67,691,863 

Income Related to Bank Charges and Banking Service Fees

20 

10,273,772 

10,914,980 

13,330,689 

13,881,523 

Allowance for Loans Losses

8,f

(10,719,910) 

(7,867,982) 

(13,501,276) 

(9,696,720) 

Other Revenues and Expenses

(3,819,249) 

(4,502,059) 

(4,765,454) 

(5,652,851) 

Financial Expenses

(80,013,864) 

(34,678,748) 

(80,901,530) 

(34,423,856) 

Third-party Input

(5,622,615) 

(5,267,042) 

(6,453,764) 

(6,142,457) 

Materials, Energy and Others

(183,726) 

(188,293) 

(195,952) 

(197,088) 

Third-Party Services

22 

(1,367,295) 

(1,388,194) 

(1,785,083) 

(1,753,297) 

Others

(4,071,594) 

(3,690,555) 

(4,472,729) 

(4,192,072) 

Gross Added Value

3,451,681 

19,941,254 

9,055,397 

25,657,502 

Retentions

Depreciation and Amortization

22 

(1,937,155) 

(1,639,284) 

(2,285,648) 

(2,053,665) 

Added Value Produced Net

1,514,526 

18,301,970 

6,769,749 

23,603,837 

Added Value Received from Transfer Investments in Affiliates and Subsidiaries

12 

2,237,263 

2,160,418 

24,941 

35,109 

Added Value to Distribute

3,751,789 

20,462,388 

6,794,690 

23,638,946 

Added Value Distribution

Employee

6,008,872 

0,0% 

6,060,554 

29,6% 

6,841,258 

0,0% 

6,854,829 

29,0% 

Compensation

21 

2,758,105 

2,886,565 

3,112,134 

3,254,268 

Benefits

21 

932,903 

1,015,876 

1,069,051 

1,151,252 

Government Severance Indemnity Funds for Employees - FGTS

229,493 

108,325 

278,880 

123,918 

Others

2,088,371 

2,049,788 

2,381,193 

2,325,391 

Taxes and Contributions

2,359,638 

0,0% 

1,823,192 

8,9% 

4,760,485 

0,0% 

2,603,906 

11,0% 

Federal

1,853,588 

1,638,147 

4,125,806 

2,363,681 

State

244 

32 

358 

48 

Municipal

505,806 

185,013 

634,321 

240,177 

Compensation of Third-Party Capital - Rental

22 

592,771 

0,0% 

570,648 

2,8% 

604,073 

0,0% 

591,674 

2,5% 

Remuneration of Interest on Capital

(5,209,492) 

0,0% 

12,007,994 

58,7% 

(5,411,126) 

0,0% 

13,588,537 

57,5% 

Interest on Equity

18,b

1,659,975 

1,000,000 

1,000,000 

Profit Reinvestment

(6,869,467) 

11,007,994 

(5,310,002) 

12,859,112 

Participation Results of Non-Controlling Stockholders

18,f

(101,124) 

(270,575) 

Total

3,751,789 

0,0% 

20,462,388 

100,0% 

6,794,690 

0,0% 

23,638,946 

100,0% 

 


1.     General Information

Banco Santander (Brasil) S,A, (Banco Santander or Bank), directly and indirectly controlled by Banco Santander, S,A,, based in Spain (Banco Santander Spain), is the lead institution of the Financial and Prudential Conglomerate (Conglomerate Santander) under the authority of the Brazilian Central Bank (Bacen), established as a corporation, with head headquarters at Avenida Presidente Juscelino Kubitschek, 2041 and 2235 - A Block - Vila Olímpia – São Paulo - SP, Banco Santander operates as a multiple service bank, conducting its operations by means of portfolios such as commercial, investment, loans and advances, mortgage loans, leasing and foreign exchange, Through its subsidiaries, the Bank also operates on the segments of payment industry, shares club management, securities and insurance brokerage operations, consumer finance, payroll-deductible loans, digital platforms, management and recovery of non-performing loans, capitalization and pension plan, The Bank's activities are conducted within the context of a group of institutions that operate on an integrated basis in the financial market, The corresponding benefits and costs of providing services are absorbed between them and are conducted in the normal course of business and under commutative conditions,

2.     Presentation of Financial Statements

a)     Presentation

The individual and condensed consolidated interim financial statements of Banco Santander (Brasil) S,A,, which include its dependence abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with accounting practices adopted in Brazil, established by the Brazilian Corporation Law, National Monetary System (CMN), Central Bank of Brazil (Bacen) and the model of the document provided for in the Accounting Plan of the Institutions of the National Financial System (COSIF) of the Brazilian Securities and Exchange Commission (CVM), in which they do not conflict with the standards issued by the Central Bank and show all information relevant to the financial statements, which are consistent with those used by management in its management,

The CMN Resolution nº 4,720/2019 and Bacen Circular nº 3,959/2019 established general criteria and procedures for the preparation and disclosure of the Financial Statements effective from January / 2020, including: the presentation of the Statement of Comprehensive Income and the presentation of Financial Statements Condensed intermediates, The changes made by them are being contemplated from this Financial Statement,

The consolidated financial statements include the Bank and its subsidiaries indicated in Note 2,b,1 and investment funds in Note 2,b,3, where Santander Conglomerate companies are the main beneficiaries or holders of the main obligations, The portfolios of these investment funds are classified by type of operation and are distributed in the same categories in which they were originally allocated,

In the preparation of the consolidated financial statements, equity interests, relevant balances receivable and payable, income and expenses arising from transactions between branches in the country, foreign branches and subsidiaries, unrealized results between these companies were eliminated and the participation minority shareholders' equity and income,

All the relevant information related to Banco Santander's financial statements, and only them, are being evidenced, and correspond to those used by Banco Santander´s management,

During the preparation of the consolidated financial statements the information regarding equity in subsidiaries, significant receivable and payable balances, revenues and expenses arising from transactions between domestic branches, foreign branches and subsidiaries, unrealized profits between these entities and non-controlling stockholders participation are stated separately in stockholders’ equity and in the income statements,

Leasing operations have been reclassified in order to reflect its financial position according to the financial method,

The preparation of financial statements requires Management estimates that affect the reported amounts of assets and liabilities, disclosure of provision and contingent liabilities and the reported amounts of revenues and expenses for the reporting periods, Since Management’s judgment involves making estimates concerning the probability of future events, actual amounts could differ from those estimates, The main estimates are provision of allowance for loan losses, realization of the tax credit, contingent liabilities, pension plan and the fair value of financial assets,

The Board of Directors authorized the issuance of the Financial Statements of the exercise ended September 30, 2020 at the meeting held on October 26, 2020,

The consolidated interim financial statements based on international accounting standards issued by the International Accounting Standards Board (IASB) for the exercise ended on September 30, 2020 will be disclosed in a legal term, at the website www,santander,com,br/ri,


 

b)    Affiliates, Subsidiaries and Jointly Controlled Entities

b,1) Affiliates and Subsidiaries - Scope of Consolidation

Quantity of Shares or Quotas Owned (in Thousands)

Investments

Activity

Common Shares and Quotas

Preferred Shares

Direct Participation

Participation

Controlled by Banco Santander

Santander Leasing S,A, Arrendamento Mercantil (Santander Leasing)

Leasing

85 

78,58% 

100,00% 

Santander Brasil Administradora de Consórcio Ltda, (Santander Brasil Consórcio)

Buying Club

238,886 

100,00% 

100,00% 

Banco Bandepe S,A,

Bank

3,589 

100,00% 

100,00% 

Banco RCI Brasil S,A,

Bank

81 

81 

39,89% 

39,89% 

Aymoré Crédito, Financiamento e Investimento S,A, (Aymoré CFI)

Financial

2,877 

100,00% 

100,00% 

Santander CCVM

Broker

14,067,673 

14,067,673 

99,99% 

100,00% 

Santander Corretora de Seguros, Investimentos e Serviços S,A, (Santander Corretora de Seguros)

Other Activities

7,184 

100,00% 

100,00% 

Getnet S,A, (Note 2,c,i & 2,c,e)

Payment Institution

69,565 

100,00% 

100,00% 

Sancap Investimentos e Participações S,A, (Sancap)

Holding

23,538,159 

100,00% 

100,00% 

Santander Brasil EFC

Financial

75 

100,00% 

100,00% 

Atual Serviços de Recuperação de Créditos e Meios Digitais S,A,

Recovery of Defaulted Credits

1,464,627 

100,00% 

100,00% 

Santander Holding Imobiliária S,A, (Note 2,c,h)

Holding

481,196 

100,00% 

100,00% 

Santander Brasil Tecnologia S,A,

Tecnology

45,371 

100,00% 

100,00% 

Rojo Entretenimento S,A,

Other Activities

7,417 

94,60% 

94,60% 

BEN Benefícios e Serviços S,A,  (BEN Benefícios)

Other Activities

90,000 

100,00% 

100,00% 

Esfera Fidelidade S,A,

Other Activities

10,001 

100,00% 

100,00% 

Banco Olé Bonsucesso Consignado S,A, (Olé Consignado) 100,00%

Bank

435,599 

60,00% 

100,00% 

Bosan Participações S,A,

Other Activities

303,056 

93,718 

100,00% 

100,00% 

Sanb Promotora de Vendas e Cobrança Ltda,

Other Activities

6,950 

100,00% 

100,00% 

Santander Tecnologia e Inovação Ltda,

Other Activities

5,045 

100,00% 

100,00% 

Toque Fale Serviços de Telemarketing Ltda, (Toque Fale) (Nota 2,c,c)

Other Activities

75,050 

100,00% 

100,00% 

Controlled by Aymoré CFI

Banco PSA 

Bank

105 

0,00% 

50,00% 

Banco Hyundai Capital Brasil S,A, (Nota 2,c,j,1)

Bank

150,000 

0,00% 

50,00% 

Controlled by Santander Leasing

PI Distribuidora de Títulos e Valores Mobiliários S,A,

Leasing

182 

0,00% 

100,00% 

Controlled by Sancap

Santander Capitalização S,A, (Santander Capitalização)

Capitalization

64,615 

0,00% 

100,00% 

Evidence Previdência S,A,

Private Pension

42,819,564 

0,00% 

100,00% 

Controlada da Santander Holding Imobiliária S,A,

 

 

 

 

 

 

Summer Empreendimentos Ltda,

 

Other Activities

17,084 

100,00% 

Controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S,A,

Return Capital Serviços de Recuperação de Créditos S,A, (Nota 2,c,d)

Collection and Recover of Credit Management

200 

0,00% 

100,00% 

Controlled by Return Capital Serviços de Recuperação de Créditos S,A, (current name of Ipanema Empreendimentos e Participações S,A,)

Return Gestão de Recursos S,A, (atual denominação social da Gestora de Investimentos Ipanema S,A,)

Resources Management

11 

0,00% 

100,00% 

Jointly Controlled Companies by Sancap

Santander Auto S,A, (Nota 2,c,g)

Other Activities

22,452 

0,00% 

50,00% 

Controlled by Getnet S,A

Auttar HUT Processamento de Dados Ltda, (Auttar HUT)

Other Activities

3,865 

0,00% 

100,00% 

 


b,2) Jointly Controlled - Equity Method

Quantity of Shares or Quotas Owned (in Thousands)

Investments

Activity

Common Shares and Quotas

Preferred Shares

Direct Participation

Participation

Jointly Controlled Companies by Banco Santander

Norchem Participações e Consultoria S,A, (Norchem Participações)

Other Activities

950 

50,00% 

50,00% 

Estruturadora Brasileira de Projetos S,A, - EBP (EBP)

Other Activities

3,859 

2,953 

11,11% 

11,11% 

Gestora de Inteligência de Crédito S,A, (Gestora de Crédito)

Credit Bureau

3,560 

3,560 

20,00% 

20,00% 

Campo Grande Empreendimentos Ltda,

Other Activities

255 

25,32% 

25,32% 

Jointly Controlled Companies by Santander Corretora de Seguros

Webmotors S,A,

Other Activities

425,126,827 

70,00% 

TecBan - Tecnologia Bancária S,A, (TecBan)

Other Activities

743,944 

68,771 

18,98% 

PSA Corretora de Seguros e Serviços Ltda, (PSA Corretora de Seguros)

Insurance Broker

450 

50,00% 

Hyundai Corretora de Seguros Ltda, (Nota 2,c,j,2)

Insurance Broker

1,000 

50,00% 

Controlled by Webmotors S,A,

Loop Gestão de Pátios S,A, (Loop)

Other Activities

23,243 

51,00% 

Controlled by TecBan

Tbnet Comércio, Locação e Administração Ltda, (Tbnet)

Other Activities

539,353 

100,00% 

Controlled by Tebnet

Tbforte Segurança e Transporte de Valores Ltda, (Tbforte)

Other Activities

517,505 

100,00% 

Affiliate of Banco Santander

Norchem Holdings e Negócios S,A, (Norchem Holdings)

Other Activities

1,679 

29,00% 

29,00% 

 

b,3) Investment Funds Consolidated

·         Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior (Santander FI Amazonas);

·         Santander Fundo de Investimento Diamantina Multimercado Crédito Privado de Investimento no Exterior (Santander FI Diamantina);

·         Santander Fundo de Investimento Guarujá Multimercado Crédito Privado de Investimento no Exterior (Santander FI Guarujá);

·         Santander Fundo de Investimento Unix Multimercado Crédito Privado (Santander FI Unix);

·         Santander Fundo de Investimento SBAC Referenciado DI Crédito Privado (Santander FI SBAC);

·         Santander Paraty QIF PLC (Santander Paraty) (4);                                       

·         Venda de Veículos Fundo de Investimento em Direitos Creditórios (Venda de Veículos FIDC) (1);   

·         Fundo de Investimento em Direitos Creditórios RN Brasil - Financiamento de Veículos (FI RN Brasil - Financiamento de Veículos) (2);

·         Prime 16 – Fundo de Investimento Imobiliário (atual denominação do BRL V - Fundo de Investimento Imobiliário - FII) (3);

·         Santander FI Hedge Strategies Fund (Santander FI Hedge Strategies) (4);                                                                            

·         Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema VI - Não Padronizado (Fundo Investimento Ipanema NPL VI) (5);                                                                                                                                        

·         Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema V - Não Padronizado (Fundo Investimento Ipanema NPL V);

·         Santander Hermes Multimercado Crédito Privado Infraestrutura Fundo de Investimentos; and

·         Fundo de Investimentos em Direitos Creditórios Atacado – Não Padronizado (6),

(1)     The carmaker Renault (not belonging to the Conglomerate Santander) sells its trade receivables to the Fund, This Fund buys only trade receivables from Renault carmaker, In turn, the Banco RCI Brasil S,A, (Note 14) owns 100% of its subordinated shares,

(2)     Banco RCI Brasil S,A, sold receivables (CDC portfolio) to FI RN Brasil – Financiamento de Veículos, The senior shares will have only one investor, Banco RCI Brasil S,A, holds 100% of subordinated shares,

(3)     Banco Santander was a creditor for certain overdue credit operations that had real estate as collateral, The operation for the recovery of these credits consists of the contribution of properties as collateral to the capital of the Real Estate Investment Fund and the consequent transfer of the Fund's quotas to Banco Santander, by means of a payment in payment of the aforementioned credit operations,

(4)     Banco Santander, through its subsidiaries, holds the risks and benefits of Santander Paraty and the Santander FI Hedge Strategies Subfund, resident in Ireland, and both are fully consolidated in its Consolidated Financial Statements, In the Irish market, an investment fund can not act directly and, for that reason, it was necessary to create another structure (a sub-fund), Santander FI Hedge Strategies, Santander Paraty does not have a financial position, and all position is derived from the financial position of Santander FI Hedge Strategies,

(5)     Refers to a structure in which Banco Santander sold certain credit operations, which had already been transferred to losses (operations overdue for more than 360 days) to this fund, Atual Serviços de Recuperação de Creditos e Meios Digitais S,A, (current corporate name of Atual Companhia Securitizadora de Creditos Financeiros) (Note 2,b,1), a company controlled by Banco Santander, holds 100% of the shares in this fund,

(6)     This fund started to be consolidated in October 2017 and is indirectly controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S,A,

 

c)     Corporate Restructuring

Several social movements were implemented in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander,

i) Disposal of the equity interest held in Super Payments and Administration of Means of Electronic Media S,A,

On February 28, 2020, the sale to Superdigital Holding Company, SL of a company indirectly controlled by Banco Santander, SA, of the shares representing the entire share capital of Super Payments and Administração de Meios Eletrônico SA (“Superdigital”) for the amount R$270 million, As a result, the Company is no longer a shareholder of Superdigital,

ii) Put option of equity interest in Banco Olé Bonsucesso Consignado S,A,

On March 14, 2019, the minority shareholder of Banco Olé Bonsucesso Consignado S,A, (Olé Consignado) formalized its interest to exercise the put option right provided in the Investment Agreement, executed on July 30, 2014, to sell its 40% equity interest in the capital stock of Olé Consignado to Banco Santander (Brazil) S,A, (“Banco Santander”),

On December 20, 2019, the parties entered into a binding agreement for the acquisition, by Banco Santander, of the all the shares issued by Bosan Participações S,A, (holding company whose only asset are shares representing 40% of the capital of Banco Olé), for the total amount of R$1,6 billion (“Operation”), to be paid on the closing date of the Operation,

On January 31, 2020, the Company and the shareholders of Bosan Participações SA (“Bosan”) concluded the definitive agreement and signed the purchase and sale agreement for 100% of the shares issued by Bosan, through the transfer of Bosan's shares to Company and payment to sellers in the total amount of R$1,608,772,783,47, As a result, Banco Santander became, directly and indirectly, the holder of 100% of Banco Olé's shares,

iii) Acquisition of direct equity interest in Toque Fale Serviços de Telemarketing LTDA,

On March 24, 2020, the Company acquired shares representing the total share capital of Toque Fale Serviços de Telemarketing LTDA (“Toque Fale”) for the amount of R$1,099,854,72, corresponding to the equity value of the quotas on February 29, 2020, previously held by Getnet Adquirência e Serviços para Means of Payment SA and Auttar HUT Processamento de Dados LTDA, As a result, the Company became a direct shareholder of Toque Fale and holder of 100% of its capital,

iv) Acquisition of Summer Empreendimentos Ltda,

On May 14, 2019, Banco Santander (Brasil) S,A, and its wholly owned subsidiary Santander Holding Imobiliária S,A, (“SHI”) entered into a binding document with the partners of Summer Empreendimentos Ltda, (“Summer”) establishing the terms of the negotiation of purchase and sale of quotas representing the totality of Summer's share capital, The acquisition was approved by BACEN on September 16, 2019 and concluded on September 20, 2019, so that SHI now holds 99,999% and Banco Santander 0,001% of the shares representing Summer's share capital, Due to the Entity's sale plan in the short term, Summer was initially recorded as Non-Current Assets Held by the Sale, at cost, In June 2020, with the failure to execute the established plan, Summer became part of the scope of Banco Santander Consolidated Financial Statements,

v) Incorporations of Banco Olé Consignado and Bosan Participações S,A,

On August 31, 2020, the shareholders of Banco Santander (Brasil) SA (“Santander Brasil”) approved the merger, by Santander Brasil, of Banco Olé Consignado SA and Bosan Participações SA, The mergers (i) did not result in an increase in the Santander Brasil's share capital; and (ii) are subject to approval by the Central Bank of Brazil,

 

3.     Significant Accounting Policies

There was no change in the accounting practices and policies adopted by the Bank for the base date of September 30, 2020, These practices are described in note 3 of the Individual and Consolidated Financial Statements of December 31, 2019,

Resolution nº, 4,782 of March 16, 2020, subsequently amended by Resolution nº, 4,791 of March 26, 2020, which came into force as of its publication date, determines that in cases of restructuring of credit operations carried out up to 30 As of September 2020, the restructuring is no longer an indicator for considering problematic assets, In case this classification has already been made considering exclusively the restructuring characteristic, the risk exposure as a problematic asset can be reversed, The Resolution determines that this rule does not apply to operations that were already classified as problematic on the date of publication of the Resolution and operations that present evidence that they will not be honored in the new conditions,

Resolution nº, 4,803 of April 9, 2020, which came into force as of its publication date and allows operations renegotiated in the period from March 1 to September 30, 2020 to be reclassified to the level at which they were classified on the day February 29, 2020, except for operations that on February 29, 2020 had a delay equal to or greater than fifteen days in the payment of the installment of principal or charges and operations that show evidence that they will not be honored in the new conditions,

Resolution No, 4,797 was revoked, and replaced by Resolution No, 4820, which takes effect from May 29, 2020 and determines that financial institutions and other institutions authorized to operate by the Central Bank of Brazil are prevented from:

(i)             remunerate own capital, including in the form of prepayment, above:

(a)    amount equivalent to the minimum mandatory dividend, including in the form of interest on capital, in the case of institutions incorporated in the form of a joint stock company;

(b)    amount equivalent to the minimum profit distribution established in the articles of association in the case of institutions incorporated in the form of limited liability companies

(ii)            repurchase own shares (it will only be allowed if through stock exchanges or an organized over-the-counter market, up to the limit of 5% (five percent) of the shares issued, including the shares recorded in treasury at the entry into force of this Resolution);

(iii)           Reduce the social capital, except in cases that are mandatory, in accordance with the governing legislation or when approved by the Central Bank;

(iv)           increase any remuneration, fixed or variable, of directors and members of the board of directors, in the case of corporation, administrators, in the case of limited companies;

The amounts subject to the aforementioned prohibitions cannot be subject to a future disbursement obligation, and these prohibitions apply as of the publication date of Resolution No, 4,797 (on April 6, 2020) and December 31, 2020 and must be observed regardless of the maintenance of funds in an amount higher than the Additional Principal Capital (ACP), which are dealt with in Resolutions No, 4,193, of March 1, 2013, and 4,783, of March 16, 2020,

Any anticipation of the amounts mentioned in items "a" and "b" of item I must be carried out onservatively, consistent and compatible with the uncertainties of the current economic situation,

 

4.     Cash and Cash Equivalents

Bank

9/30/2020

12/31/2019

9/30/2019

12/31/2018

Cash

15,148,271 

9,543,649 

9,914,117 

11,358,459 

Interbank Investments

15,514,365 

11,877,783 

7,472,861 

14,496,489 

Money Market Investments

10,315,860 

110,746 

643,358 

4,925,769 

Interbank Deposits

1,316,637 

1,465,065 

1,891,109 

1,702,653 

Foreign Currency Investments

3,881,868 

10,301,972 

4,938,394 

7,868,067 

Total

30,662,636 

21,421,432 

17,386,978 

25,854,948 

Consolidated

9/30/2020

31/12/2019

9/30/2019

12/31/2018

Cash

15,338,105 

9,924,644 

10,306,910 

11,629,112 

Interbank Investments

14,875,441 

11,519,019 

6,483,239 

13,656,870 

Money Market Investments

10,315,860 

110,746 

643,358 

4,925,769 

Interbank Deposits

677,713 

1,105,446 

900,222 

862,449 

Foreign Currency Investments

3,881,868 

10,302,827 

4,939,659 

7,868,652 

Total

30,213,546 

21,443,663 

16,790,149 

25,285,982 

 

5.     Interbank Investments

Bank

9/30/2020

12/31/2019

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Money Market Investments

28,351,346 

20,905,702 

49,257,048 

28,703,365 

Own Portfolio

5,338,294 

3,868,962 

9,207,256 

821,425 

Financial Treasury Bills - LFT

121,637 

654,829 

776,466 

10,500 

National Treasury Bills - LTN

2,573,014 

745,871 

3,318,885 

National Treasury Notes - NTN

2,643,643 

2,468,262 

5,111,905 

810,925 

Third-party Portfolio

7,484,957 

7,484,957 

9,011,703 

National Treasury Bills - LTN

457,427 

National Treasury Notes - NTN

7,484,957 

7,484,957 

8,554,276 

Sold Position

15,528,095 

17,036,740 

32,564,835 

18,870,237 

Financial Treasury Bills - LFT

593,860 

593,860 

National Treasury Bills - LTN

2,793,690 

5,328,414 

8,122,104 

2,906,634 

National Treasury Notes - NTN

12,734,405 

11,114,466 

23,848,871 

15,963,603 

Interbank Deposits

15,673,900 

37,398,318 

28,359,805 

81,432,023 

76,924,193 

Foreign Currency Investments

3,881,868 

3,881,868 

10,301,972 

Total

47,907,114 

58,304,020 

28,359,805 

134,570,939 

115,929,530 

Consolidated

9/30/2020

12/31/2019

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Money Market Investments

28,854,933 

20,159,831 

49,014,764 

28,703,365 

Own Portfolio

5,841,881 

3,123,091 

8,964,972 

821,425 

Financial Treasury Bills - LFT

71,706 

654,829 

726,535 

10,500 

National Treasury Bills - LTN

3,127,107 

3,127,107 

National Treasury Notes - NTN

2,643,068 

2,468,262 

5,111,330 

810,925 

Third-party Portfolio

7,484,957 

7,484,957 

9,011,703 

National Treasury Bills - LTN

457,427 

National Treasury Notes - NTN

7,484,957 

7,484,957 

8,554,276 

Sold Position

15,528,095 

17,036,740 

32,564,835 

18,870,237 

Financial Treasury Bills - LFT

593,860 

593,860 

National Treasury Bills - LTN

2,793,690 

5,328,414 

8,122,104 

2,906,634 

National Treasury Notes - NTN

12,734,405 

11,114,466 

23,848,871 

15,963,603 

Interbank Deposits

4,546,701 

1,956,747 

6,503,448 

4,361,302 

Foreign Currency Investments

3,881,868 

3,881,868 

10,302,827 

Total

32,736,801 

24,706,532 

1,956,747 

59,400,080 

43,367,494 


6.     Securities and Derivatives Financial Instruments

a)     Securities

I) By Category

 

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

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

45,956,934 

(324,735)

45,632,199 

32,557,896 

55,516,098 

(61,798)

55,454,301 

35,977,471 

Government Securities

45,358,893 

(322,945) 

45,035,948 

30,755,634 

52,186,331 

(60,007) 

52,126,324 

33,158,573 

Private Securities

598,041 

(1,790) 

596,251 

1,802,262 

3,329,767 

(1,790) 

3,327,977 

2,818,898 

Available-for-Sale Securities

131,503,185 

2,374,067 

2,235,516 

136,112,768 

118,508,274 

137,638,462 

2,374,067 

2,351,940 

142,364,469 

128,296,445 

Government Securities

100,611,810 

2,299,446 

1,640,045 

104,551,301 

89,526,633 

107,399,861 

2,299,446 

1,753,835 

111,453,142 

98,943,695 

Private Securities

30,891,375 

74,620 

595,471 

31,561,467 

28,981,641 

30,238,602 

74,620 

598,104 

30,911,326 

29,352,750 

Held-to-Maturity Securities

16,438,103 

16,438,103 

11,739,597 

16,438,103 

16,438,103 

11,739,597 

Government Securities

15,899,247 

15,899,247 

11,275,488 

15,899,247 

15,899,247 

11,275,488 

Private Securities

538,856 

538,856 

464,109 

538,856 

538,856 

464,109 

Total Securities

193,898,223 

2,049,331 

2,235,516 

198,183,070 

162,805,767 

209,592,664 

2,312,269 

2,351,940 

214,256,873 

176,013,513 

 


 

II) Trading Securities

Bank

09/30/2020

12/31/2019

By Maturity

09/30/2020

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

45,358,893 

(322,945)

45,035,948 

30,755,634 

3,547,971 

11,802,501 

11,206,544 

18,478,932 

45,035,948 

Financial Treasury Bills - LFT

2,014,015 

(2,952) 

2,011,063 

3,158,889 

1,237,767 

132,354 

640,942 

2,011,063 

National Treasury Bills - LTN

14,553,580 

(59,439) 

14,494,141 

6,838,515 

3,323,612 

5,226,633 

2,592,041 

3,351,856 

14,494,141 

National Treasury Notes - NTN

27,980,673 

(258,093) 

27,722,580 

20,687,308 

212,513 

4,589,514 

8,465,005 

14,455,549 

27,722,580 

Agricultural Debt Securities - TDA

50,706 

3,572 

54,279 

70,922 

11,244 

16,081 

13,629 

13,325 

54,279 

Brazilian Foreign Debt Notes

737,884 

(5,684) 

732,200 

731,530 

246 

424 

732,200 

Debentures

22,035 

(349) 

21,686 

603 

976 

3,270 

16,837 

21,686 

Private Securities

598,041 

(1,790)

596,251 

1,802,262 

247,432 

9,838 

19,711 

24,765 

294,505 

596,251 

Shares

(1) 

Investment Fund Shares

241,806 

5,626 

247,432 

834,063 

247,432 

247,432 

Debentures

248,224 

(4,130) 

244,094 

439,819 

9,838 

19,201 

11,395 

203,660 

244,094 

Eurobonds

492,774 

Certificates of Real Estate Receivables - CRI

18,829 

(377) 

18,452 

22,869 

4,795 

13,656 

18,452 

Certificates of Agribusiness Receivables - CRA

89,182 

(2,908) 

86,273 

12,737 

510 

8,575 

77,189 

86,273 

Total

45,956,934 

(324,735)

45,632,199 

32,557,896 

247,432 

3,557,809 

11,822,211 

11,231,309 

18,773,437 

45,632,199 

Consolidated

09/30/2020

12/31/2019

By Maturity

09/30/2020

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

52,186,331 

(60,007)

52,126,324 

33,158,573 

3,547,971 

16,464,731 

11,266,064 

20,847,557 

52,126,324 

Financial Treasury Bills - LFT

6,871,505 

(5,034) 

6,866,471 

3,530,356 

5,737,593 

191,873 

937,005 

6,866,471 

National Treasury Bills - LTN

14,552,790 

(59,439) 

14,493,352 

6,838,515 

3,323,612 

5,226,633 

2,592,041 

3,351,066 

14,493,352 

National Treasury Notes - NTN

29,951,411 

6,926 

29,958,337 

22,718,780 

212,513 

4,751,918 

8,465,005 

16,528,901 

29,958,337 

Agricultural Debt Securities - TDA

50,706 

3,572 

54,279 

70,922 

11,244 

16,081 

13,629 

13,325 

54,279 

Brazilian Foreign Debt Notes

737,884 

(5,684) 

732,200 

731,530 

246 

424 

732,200 

Debentures

22,035 

(349) 

21,686 

603 

976 

3,270 

16,837 

21,686 

Private Securities

3,329,767 

(1,790)

3,327,977 

2,818,898 

2,005,732 

9,838 

52,176 

24,765 

1,235,466 

3,327,977 

Shares

1,262,625 

(1) 

1,262,624 

665,075 

1,262,624 

1,262,624 

Investment Fund Real Estate

737,481 

5,626 

743,108 

1,068,068 

743,108 

743,108 

Investment Fund Shares

36,067 

Debentures

1,179,161 

(4,130) 

1,175,031 

439,819 

9,838 

19,201 

11,395 

1,134,597 

1,175,031 

Eurobonds

10,024 

10,024 

492,774 

10,024 

10,024 

Certificates of Real Estate Receivables - CRI

18,829 

(377) 

18,452 

22,869 

4,795 

13,656 

18,452 

Certificates of Agribusiness Receivables - CRA

89,182 

(2,908) 

86,273 

12,737 

510 

8,575 

77,189 

86,273 

Bill of Exchange

32,465 

32,465 

81,489 

32,465 

32,465 

Total

55,516,098 

(61,798)

55,454,301 

35,977,471 

2,005,732 

3,557,809 

16,516,907 

11,290,829 

22,083,024 

55,454,301 


III) Available-for-Sale Securities

Bank

09/30/2020

12/31/2019

By Maturity

09/30/2020

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

100,611,810 

2,299,446 

1,640,045 

104,551,301 

89,526,633 

2,588,679 

17,873,670 

23,452,444 

60,636,508 

104,551,301 

Treasury Certificates - CFT

1,177 

160 

1,336 

1,165 

164 

1,172 

1,336 

Securitized Credit

548 

27 

575 

151 

424 

575 

Financial Treasury Bills - LFT

20,642,477 

(113,080) 

20,529,397 

11,151,613 

3,216,061 

6,959,914 

10,353,421 

20,529,397 

National Treasury Bills - LTN

33,267,087 

565,002 

(167,467) 

33,664,622 

30,984,931 

11,326,323 

7,485,638 

14,852,662 

33,664,622 

National Treasury Notes - NTN (3)

43,031,685 

1,734,444 

1,904,060 

46,670,189 

47,388,924 

26,388 

3,330,698 

9,005,719 

34,307,384 

46,670,189 

Mexican Foreign Debt Bonds

2,094,552 

16,398 

2,110,949 

2,110,949 

2,110,949 

Brazilian Foreign Debt Bonds (Global Bonds)

1,574,284 

(52) 

1,574,232 

451,191 

1,123,042 

1,574,232 

Private Securities

30,891,375 

74,620 

595,471 

31,561,467 

28,981,641 

2,266,476 

916,773 

6,909,117 

9,557,394 

11,911,708 

31,561,467 

Shares

320 

(270) 

50 

60 

50 

50 

Investment Funds

2,161,400 

(9,192) 

2,152,207 

3,963,540 

2,152,207 

2,152,207 

Debentures (1)

13,659,879 

74,620 

428,337 

14,162,836 

11,915,052 

733 

93,693 

1,370,702 

5,136,172 

7,561,537 

14,162,836 

Promissory Notes - NP

5,313,396 

30,130 

5,343,526 

4,696,855 

36,037 

177,042 

2,788,464 

2,213,853 

128,131 

5,343,526 

Financial Bills - LF

260,171 

6,250 

266,421 

192,804 

266,421 

266,421 

Certificates of Real Estate Receivables - CRI

22,038 

(165) 

21,873 

36,680 

18,293 

3,580 

21,873 

Certificates of Agribusiness Receivables - CRA

40,584 

(23) 

40,561 

36,680 

40,561 

40,561 

Brazilian Foreign Debt Bonds (Global Bonds)

3,404,280 

109,815 

3,514,096 

3,311,195 

3,514,096 

3,514,096 

Rural Product Note - CPR

6,029,308 

30,588 

6,059,896 

4,828,775 

77,448 

646,039 

2,731,658 

1,940,947 

663,804 

6,059,896 

Total

131,503,185 

2,374,067 

2,235,516 

136,112,768 

118,508,274 

2,266,476 

3,505,451 

24,782,787 

33,009,837 

72,548,216 

136,112,768 

 


 

 

Consolidated

09/30/2020

12/31/2019

By Maturity

09/30/2020

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

107,399,861 

2,299,446 

1,753,835 

111,453,142 

98,943,695 

61,153 

2,588,679 

20,951,962 

26,012,191 

61,839,158 

111,453,142 

Treasury Certificates - CFT

1,177 

160 

1,336 

1,165 

164 

1,172 

1,336 

Securitized Credit

548 

27 

575 

151 

424 

575 

Financial Treasury Bills - LFT

23,077,662 

(117,342) 

22,960,320 

16,547,365 

61,153 

3,876,390 

8,319,298 

10,703,479 

22,960,320 

National Treasury Bills - LTN

34,989,367 

565,002 

(109,151) 

35,445,218 

32,500,648 

12,015,077 

8,403,256 

15,026,885 

35,445,218 

National Treasury Notes - NTN

45,662,271 

1,734,444 

1,963,797 

49,360,512 

49,894,517 

26,388 

5,059,907 

9,288,465 

34,985,752 

49,360,512 

Mexican Foreign Debt Bonds

2,094,552 

16,398 

2,110,949 

2,110,949 

2,110,949 

Brazilian Foreign Debt Bonds (Global Bonds)

1,574,284 

(52) 

1,574,232 

451,191 

1,123,042 

1,574,232 

Private Securities

30,238,602 

74,620 

598,104 

30,911,326 

29,352,750 

1,639,219 

916,773 

6,909,117 

9,557,394 

11,888,823 

30,911,326 

Shares

47,541 

(270) 

47,271 

82,387 

47,271 

47,271 

Investment Fund Shares in Participation - FIP

1,450,099 

(9,192) 

1,440,907 

3,082,832 

1,440,907 

1,440,907 

Investment Fund Shares

34,190 

2,633 

36,823 

57,531 

36,823 

36,823 

Debentures

13,636,994 

74,620 

428,337 

14,139,952 

13,063,691 

733 

93,693 

1,370,702 

5,136,172 

7,538,653 

14,139,952 

Eurobonds

3,404,280 

109,815 

3,514,096 

3,311,195 

3,514,096 

3,514,096 

Promissory Notes - NP

5,313,396 

30,130 

5,343,526 

4,696,855 

36,037 

177,042 

2,788,464 

2,213,853 

128,131 

5,343,526 

Financial Bills - LF

260,171 

6,250 

266,421 

192,804 

266,421 

266,421 

Certificates of Real Estate Receivables - CRI

22,038 

(165) 

21,873 

36,680 

18,293 

3,580 

21,873 

Certificates of Agribusiness Receivables - CRA

 

40,584 

  

 

(23) 

 

40,561 

 

 

 

 

 

 

40,561 

 

40,561 

Rural Product Note - CPR

6,029,308 

30,588 

6,059,896 

4,828,775 

77,448 

646,039 

2,731,658 

1,940,947 

663,804 

6,059,896 

Total

137,638,462 

2,374,067 

2,351,940 

142,364,469 

128,296,445 

1,700,372 

3,505,451 

27,861,079 

35,569,584 

73,727,981 

142,364,469 

(1) In the Bank and Consolidated, includes securities issued by mixed-capital companies and R$369,700 (12/31/2019 - R$262,027) securities available for sale,

(2) On September 30, 2020, the quantite of 1,400,000 in the amount of R$1,623,169 (12/31/2019 – 1,140,000 in the amount of R$1,229,297) of National Treasury Notes - NTN, are linked to the obligation assumed by Banco Santander to cover the reserves to be amortized under Plan V of the Social Security Fund (Banesprev),


 

IV) Held-to-Maturity Securities

Bank/Consolidated

By Maturity

09/30/2020

Amortized Cost

From 3 to 12 Months

From 1 to 3 Years

Over 3 Years

Held-to-Maturity Securities (1)

09/30/2020

12/31/2019

Up to 3 Months

Total

Government Securities

15,899,247 

11,275,488 

25,894 

1,903,438 

2,177,697 

11,792,218 

15,899,247 

National Treasury Notes - NTN

5,026,446 

3,414,897 

25,894 

5,000,552 

5,026,446 

Brazilian Foreign Debt Bonds

10,872,801 

7,860,591 

1,903,438 

2,177,697 

6,791,666 

10,872,801 

Private Securities

538,856 

464,109 

365,025 

173,831 

538,856 

Certificates of Agribusiness Receivables - CRA

538,856 

464,109 

365,025 

173,831 

538,856 

Total

16,438,103 

11,739,597 

25,894 

2,268,463 

2,351,528 

11,792,218 

16,438,103 

(1) The market value of held to maturity securities is R$17,399,508, (12/31/2019 - R$12,514,855),

For the quarter ended September 30, 2020, there were no disposals of federal government securities and other securities classified in the category of securities held to maturity,

Given the provisions of Article 5 of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity securities classified as held-to-maturity,        

The market value of securities is estimated based on the average quotation on organized markets and their estimated cash flows, discounted to present value using the applicable interest rate curves, considered as representative of market conditions at the end of balance,

V) Financial Income - Securities Transactions

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Income From Fixed-Income Securities (1)

7,297,844 

57,462,506 

11,888,371 

20,855,522 

7,506,636 

57,982,641 

12,622,415 

22,262,789 

Income From Interbank Investments

1,666,598 

5,466,861 

2,510,373 

6,495,090 

922,805 

2,905,174 

1,030,597 

2,755,989 

Income From Variable-Income Securities

697 

(57,272) 

18,479 

80,961 

18,125 

(9,256) 

(256,443) 

(251,146) 

Financial Income of Pension and Capitalization 

50,661 

137,897 

41,545 

108,146 

Provision for Impairment Losses (2)

(34,581) 

(194,259) 

(67,644) 

(41,030) 

(34,581) 

(194,259) 

(72,876) 

(46,262) 

Others (3)

(417,252) 

(3,590,532) 

(740,202) 

(615,706) 

(358,037) 

(3,514,196) 

(842,435) 

(713,466) 

Total

8,513,306 

59,087,304 

13,609,377 

26,774,837 

8,105,609 

57,308,001 

12,522,803 

24,116,050 

(1) Includes exchange variation revenue in the amount of R$40,485,350 in the Bank and in the Consolidated (2019 - revenue of R$473,791 in the Bank and in the Consolidated),

(2) Corresponds to the permanent loss record, referring to securities classified as available for sale,

(3) Includes the net valuation of investment fund shares and interest and exchange variation expenses in the amount of R$3,824,080 in the Bank and in the Consolidated (2019 - expense of R$144,262 in the Bank and in the Consolidated),

 

 

 

b) Derivatives Financial Instruments

The main risk factors associated to derivatives contracted are related to exchange rates, interest rates and stocks, To manage these and other market risk factors the Bank uses practices which include the measurement and follow up of the limit´s usage previously defined on internal committees, as well as the daily follow up of the portfolios values in risk, sensitivities and changes in the interest rate and exchange exposure, liquidity gaps, among other practices which allow the control and follow up on the main risk metrics that can affect the Bank´s position in the several markets which it acts, Based on this management model, the Bank has accomplished its goal, using operations with derivatives, in optimize the relation risk/benefits even in situation with great volatility,

The derivatives fair value is determined through quotation of market prices, The swaps contracts fair value is determined using discounted cash flow modeling techniques, reflecting suitable risk factors, The fair value of NDF and Future contracts are also determined based on the quotation of market prices for derivatives traded in specific chamber or using the same methodology applied for swap contracts, The fair value of options derivatives is determined based on the mathematical models, such as Black & Scholes, using yield rates, implied volatilities and the fair value of the corresponding asset, The current market prices are used to price the volatilities, For the derivatives which do not have prices directly disclosed by specific chamber, their fair values are obtained through pricing models which use market information, based on disclosed prices of more liquid assets, Interest rate curves and market volatilities are extracted from theses prices to be used as first input in these models,

I) Summary of Derivative Financial Instruments

For better presentation, as of the Financial Statements of 30 June 2020, swap operations was presented showing the balances of the differentials receivable and payable separately, without compensation, The reference values are now presented without the addition of the updated equity position of the referred contracts, the disclosure of the previous period was modified for comparison purposes,

Below, the composition of the Derivative Financial Instruments portfolio (Assets and Liabilities) by type of instrument, demonstrated by their market value:

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

Swap

17,582,737 

20,249,517 

8,620,854 

10,167,632 

15,517,554 

19,085,568 

14,625,238 

16,701,678 

Options

3,999,298 

3,769,744 

886,927 

1,593,625 

4,241,710 

4,030,634 

1,065,752 

1,699,729 

Term Contract and Other Contracts

15,269,976 

15,404,752 

1,678,454 

2,221,955 

15,315,564 

15,404,752 

1,750,150 

2,221,955 

Total

36,852,010 

39,424,014 

11,186,235 

13,983,212 

35,074,829 

38,520,954 

17,441,140 

20,623,362 

 


 

II) Derivatives Recorded in Memorandum Accounts and Balance Sheets

Bank

09/30/2020

12/31/2019

Trading

Notional (1)

Cost

Fair Value

Notional (1)

Cost

Fair Value

Swap

(3,761,978)

(2,666,780)

(1,941,477)

(1,546,778)

Assets

292,419,589 

8,211,773 

17,582,737 

265,269,199 

2,910,364 

8,620,854 

CDI (Interbank Deposit Rates)

49,857,310 

61,331 

418,207 

41,137,936 

209,224 

199,018 

Fixed Interest Rate - Real

53,331,591 

4,617,194 

8,890,158 

39,637,946 

1,900,884 

6,792,917 

Indexed to Price and Interest Rates

4,469,803 

1,336,111 

1,487,119 

2,954,640 

218,540 

301,476 

Foreign Currency

183,460,033 

2,000,905 

6,601,429 

181,538,677 

581,716 

1,327,443 

Others

1,300,852 

196,232 

185,824 

Liabilities

283,576,774 

(11,973,751)

(20,249,517)

265,269,199 

(4,851,841)

(10,167,632)

CDI (Interbank Deposit Rates)

46,609,424 

(9,041,755) 

(14,854,317) 

33,151,770 

(3,025,371) 

(94,260) 

Fixed Interest Rate - Real

62,496,056 

(2,931,879) 

(4,049,780) 

53,487,374 

(990,820) 

(7,410,825) 

Indexed to Price and Interest Rates

44,170,818 

(117) 

(38,355) 

125,014,868 

(11,658) 

(851,739) 

Foreign Currency

128,731,902 

(1,273,566) 

52,431,130 

(816,100) 

(1,685,199) 

Others

1,568,574 

(33,499) 

1,184,057 

(7,892) 

(125,609) 

Options

1,258,094,516 

(291,986)

229,554 

1,446,691,032 

(713,535)

(706,698)

Purchased Position

613,753,975 

1,448,461 

3,999,298 

678,193,198 

641,222 

886,927 

Call Option - Foreign Currency

1,221,464 

37,897 

38,325 

223,477 

1,318 

34 

Put Option - Foreign Currency

1,971,677 

69,019 

65,698 

1,508,663 

473 

4,865 

Call Option - Other

79,013,627 

305,340 

847,276 

98,154,363 

295,668 

136,084 

Interbank Market

79,013,627 

305,340 

847,276 

98,154,363 

295,668 

136,174 

Others (2)

(90) 

Put Option - Other

531,547,207 

1,036,205 

3,047,999 

578,306,695 

343,763 

745,944 

Interbank Market

531,547,207 

1,036,204 

3,047,999 

578,306,695 

343,763 

746,006 

Others (2)

(62) 

Sold Position

644,340,541 

(1,740,447)

(3,769,744)

768,497,834 

(1,354,757)

(1,593,625)

Call Option - Foreign Currency

1,306,075 

(70,051) 

(77,176) 

254,944 

(3,102) 

(1,471) 

Put Option - Foreign Currency

1,954,755 

(127,061) 

(165,170) 

315,601 

(1,528) 

(4,340) 

Call Option - Other

94,279,311 

(282,775) 

(513,344) 

174,166,801 

(562,827) 

(428,690) 

Interbank Market

1,671,056 

(49,974) 

(513,344) 

174,166,801 

(562,827) 

(428,617) 

Others (2)

92,608,255 

(232,800) 

(73) 

Put Option - Other

546,800,400 

(1,260,560) 

(3,014,054) 

593,760,488 

(787,300) 

(1,159,124) 

Interbank Market

546,800,400 

(1,260,560) 

(3,014,054) 

593,760,488 

(787,300) 

(1,159,037) 

Others (2)

(87) 

Futures Contracts

285,666,999 

432,564,396 

Purchased Position

115,740,703 

72,332,139 

Exchange Coupon (DDI)

15,238,695 

7,105,006 

Interest Rates (DI1 and DIA)

100,502,008 

55,430,519 

Foreign Currency

9,781,856 

Indexes (3)

Treasury Bonds/Notes

14,758 

Sold Position

169,926,296 

360,232,257 

Exchange Coupon (DDI)

79,114,013 

145,668,039 

Interest Rates (DI1 and DIA)

69,323,206 

196,170,105 

Foreign Currency

21,172,817 

17,208,599 

Indexes (3)

316,260 

290,254 

Treasury Bonds/Notes

895,261 

Forward Contracts and Others

131,570,221 

1,771,034 

(134,776)

100,659,795 

(900,818)

(706,698)

Purchased Commitment

73,960,421 

3,856,483 

15,269,976 

50,216,459 

(269,708)

1,515,257 

Currencies

67,953,936 

3,855,774 

15,274,277 

50,215,376 

(269,708) 

1,514,167 

Others

6,006,485 

709 

(4,301) 

1,083 

1,090 

Sell Commitment

57,609,800 

(2,085,449)

(15,404,752)

49,298,439 

(631,110)

(2,221,955)

Currencies

53,142,777 

(2,082,758) 

(15,404,526) 

49,294,662 

(631,085) 

(2,221,955) 

Others

4,467,023 

(2,691) 

(226) 

3,777 

(25) 

 


 

Consolidated

09/30/2020

12/31/2019

Trading

Notional (1)

Cost

Fair Value

Notional (1)

Cost

Fair Value

Swap

(3,761,978)

(3,568,014)

(1,941,477)

(2,076,440)

Assets

288,711,605 

8,211,773 

15,517,554 

279,253,821 

2,910,364 

14,625,235 

CDI (Interbank Deposit Rates)

45,086,646 

61,331 

3,690,504 

40,341,402 

209,224 

6,231,769 

Fixed Interest Rate - Real

51,821,036 

4,617,194 

7,963,801 

45,240,041 

1,900,884 

6,792,917 

Indexed to Price and Interest Rates

4,366,347 

1,336,111 

1,487,116 

2,169,578 

218,540 

301,476 

Foreign Currency

187,000,805 

2,000,905 

2,190,309 

191,502,800 

581,716 

1,299,073 

Others

436,771 

196,232 

185,824 

Liabilities

250,258,031 

(11,973,751)

(19,085,568)

279,197,765 

(4,851,841)

(16,701,675)

CDI (Interbank Deposit Rates)

43,889,318 

(9,041,755) 

(14,854,318) 

24,273,545 

(3,025,371) 

(94,260) 

Fixed Interest Rate - Real

43,828,728 

(2,931,879) 

(4,049,779) 

69,561,856 

(990,820) 

(13,061,820) 

Indexed to Price and Interest Rates

44,170,818 

(117) 

1,656,051 

125,014,868 

(11,658) 

(1,681,390) 

Foreign Currency

116,800,593 

(1,685,542) 

59,163,439 

(816,100) 

(1,685,199) 

Others

1,568,574 

(151,980) 

1,184,057 

(7,892) 

(179,006) 

Options

1,276,475,307 

(291,987)

211,076 

1,446,536,131 

(713,534)

(633,977)

Purchased Position

619,054,529 

1,448,460 

4,241,710 

678,089,904 

641,140 

1,065,752 

Call Option - Foreign Currency

1,221,464 

37,897 

38,325 

171,871 

1,318 

(280) 

Put Option - Foreign Currency

1,971,677 

69,019 

65,698 

1,456,975 

391 

184,002 

Call Option - Other

82,245,573 

305,340 

1,077,120 

98,154,363 

295,668 

136,086 

Interbank Market

79,013,628 

305,340 

847,276 

98,154,363 

295,668 

136,177 

Others (2)

3,231,945 

229,844 

(91) 

Put Option - Other

533,615,815 

1,036,204 

3,060,567 

578,306,695 

343,763 

745,944 

Interbank Market

531,547,207 

1,036,204 

3,047,999 

578,306,695 

343,763 

746,006 

Others (2)

2,068,607 

12,568 

(62) 

Sold Position

657,420,778 

(1,740,447)

(4,030,634)

768,446,227 

(1,354,674)

(1,699,729)

Call Option - Foreign Currency

1,306,075 

(70,051) 

(77,177) 

254,944 

(3,102) 

(1,471) 

Put Option - Foreign Currency

1,954,755 

(127,061) 

(180,292) 

263,994 

(1,445) 

(2,841) 

Call Option - Other

102,049,339 

(282,775) 

(588,637) 

174,166,801 

(562,827) 

(428,393) 

Interbank Market

1,671,056 

(49,974) 

(513,344) 

174,166,801 

(562,827) 

(428,620) 

Others (2)

100,378,282 

(232,800) 

(75,293) 

227 

Put Option - Other

552,110,609 

(1,260,560) 

(3,184,528) 

593,760,488 

(787,300) 

(1,267,024) 

Interbank Market

546,800,400 

(1,260,560) 

(3,014,054) 

593,760,488 

(787,300) 

(1,159,037) 

Others (2)

5,310,208 

(170,473) 

(107,987) 

Futures Contracts

286,054,267 

432,564,399 

Purchased Position

116,047,231 

71,603,247 

Exchange Coupon (DDI)

15,238,697 

7,105,006 

Interest Rates (DI1 and DIA)

100,808,534 

54,701,627 

Foreign Currency

9,781,856 

Indexes (3)

Treasury Bonds/Notes

14,758 

Sold Position

170,007,036 

360,961,152 

Exchange Coupon (DDI)

79,114,013 

146,032,485 

Interest Rates (DI1 and DIA)

69,815,922 

196,170,106 

Foreign Currency

20,760,841 

17,305,604 

Indexes (3)

316,260 

290,254 

Treasury Bonds/Notes

1,162,703 

Forward Contracts and Others

131,570,221 

1,770,326 

(89,188)

99,514,898 

(900,818)

(471,805)

Purchased Commitment

73,960,421 

3,855,774 

15,315,564 

50,216,459 

(269,708)

1,750,150 

Currencies

67,953,936 

3,855,774 

15,274,278 

50,215,376 

(269,708) 

1,677,365 

Others

6,006,485 

41,286 

1,083 

72,785 

Sell Commitment

57,609,800 

(2,085,448)

(15,404,752)

49,298,439 

(631,110)

(2,221,955)

Currencies

53,142,777 

(2,082,758) 

(15,404,526) 

49,294,662 

(631,085) 

(2,221,955) 

Others

4,467,023 

(2,690) 

(226) 

3,777 

(25) 

(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

09/30/2020

12/31/2019

09/30/2020

09/30/2020

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

38,882,917 

99,259,034 

154,277,638 

292,419,589 

265,269,199 

42,423,222 

75,298,149 

174,698,218 

85,725,919 

206,693,670 

Options

22,706,945 

676,880 

1,234,710,691 

1,258,094,516 

1,446,691,032 

61,274,984 

1,194,496,303 

2,323,229 

1,235,352,032 

22,742,484 

Futures Contracts

3,198,239 

282,468,760 

285,666,999 

432,564,396 

181,045,338 

52,995,667 

51,625,994 

285,666,999 

Forward Contracts and Others

63,812,057 

52,317,471 

15,440,693 

131,570,221 

100,659,795 

63,310,093 

44,625,769 

23,634,359 

365,653 

131,204,568 

Consolidated

Notional

By Counterparty

By Maturity

Trading Market

09/30/2020

12/31/2019

09/30/2020

09/30/2020

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

38,882,917 

126,261,976 

123,566,712 

288,711,605 

279,253,821 

43,690,222 

129,906,721 

115,114,663 

85,725,921 

202,985,685 

Options

22,706,946 

676,881 

1,253,091,480 

1,276,475,307 

1,446,536,131 

75,690,009 

1,197,998,881 

2,786,416 

1,235,352,034 

41,123,273 

Futures Contracts

3,198,239 

282,856,028 

286,054,267 

432,564,399 

181,561,992 

53,122,939 

51,369,336 

286,054,267 

Forward Contracts and Others

63,812,057 

52,317,471 

15,440,693 

131,570,221 

99,514,898 

63,310,091 

44,625,771 

23,634,360 

365,655 

131,204,566 

(1) Includes operations with B3 S,A, - Brazil, Bolsa, Balcão (B3) and other stock and commodity exchanges as counterparty,

(2) It consists of operations that are included in registration chambers, according to Bacen regulations,

 

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 a hedge of exposure to variation in market risk, in receipts and interest payments related to assets and liabilities recognized,

The Bank's market risk hedging methodology segregates transactions by risk factor (eg, real / dollar exchange rate risk, fixed interest rate risk in reais, dollar exchange rate risk, inflation, interest rate risk, etc,), Transactions generate exposures that are consolidated by risk factor and compared to pre-established internal limits,

To protect the market risk variation in the receipt and payment of interest, the Bank uses swap contracts and interest rate futures contracts relating to fixed assets and liabilities,

The Bank applies the market risk hedge as follows:

• Designates Foreign Currency + Coupon versus %CDI and Pre - Real Interest Rate or contracts dollar futures (DOL, DDI/DI) as derivatives instruments in Hedge Accounting structures, with foreign currency loan operations being the object of such transactions,

• The Bank has an active loan portfolio originating in Dollar at a fixed rate at Santander EFC, whose operations are recorded in Euro, As a way of managing this mismatch, the Bank designates each Euro Floating Foreign Currency swap versus Fixed Dollar corresponding credit protection instrument,

• The Bank has a portfolio of assets indexed to the Euro and traded at offshore branches, In the transaction, the value of the asset in Euro will be converted to the Dollar by the rate of the exchange contract of the transaction, As from the conversion, the principal amount of the funding, already expressed in US dollars, will be adjusted by a floating or fixed rate, The assets will be covered with Swap Cross Currency in order to cross the risk in Euro for LIBOR + Coupon,

• The Bank has a pre-fixed interest rate risk generated by government securities (NTN-F and LTN) in the Financial Assets portfolio available for sale, To manage this mismatch, the entity contracts DI futures on the Stock Exchange and designates them as a hedging instrument in a hedge accounting structure,

• The Bank has a risk to the IPCA index generated by debentures in the portfolio of securities available for sale, To manage this mismatch, the Bank contracts IPCA (DAP) futures on the Stock Exchange and designates them as a hedging instrument in a Hedge Accounting structure,

• Santander Leasing has a pre-fixed interest rate risk generated by government securities (NTN-F) in the portfolio of available-for-sale securities, To manage this mismatch, the Entity contracts interest swaps and designates them as a hedging instrument in a hedge accounting structure,

In market risk hedging, the results, both on hedging instruments and on the objects (attributable to the type of risk being hedged) are recognized directly in the income statement,

IV,II) Cash Flow Hedge

The Bank's cash flow hedging strategies consist of a hedge of exposure to changes in cash flows, interest payments and exchange rate exposure, which are attributable to changes in interest rates on recognized assets and liabilities and changes of unrecognized assets and liabilities,

The Bank applies the cash flow hedge as follows:

• It contracts fixed dollar swaps versus foreign exchange and designates them as a hedging instrument in a Cash Flow Hedge structure, with the purpose of protecting foreign exchange loans and negotiated with third parties through agency in offshore branches and securities held to maturity of Brazilian foreign debt securities,

• Contracts USD Futures or DDI + DI Futures (Synthetic Dollar Futures) and designates them as a derivative instrument in a Cash Flow Hedge structure, the object of which in this relation is part of the Bank's credit portfolio in Dollars and Promissory Notes in the portfolio of securities available for sale,

• The Bank has post-fixed interest rate risk generated by public securities (LFT) in the portfolio of available-for-sale securities, which present expected cash flows subject to Selic variations over their duration, To manage these oscillations, it contracts DI futures on the Stock Exchange and designates them as a derivative instrument in a Hedge Accounting structure,

• Banco RCI Brasil S,A, has operations CDI indexed whose purpose is funding with financial letters (LF), bills of exchange (LC) and Interbank Deposit Certificates (CDI) and designates interest rate swaps as instruments,

In cash flow hedge, the effective portion of the variation in the value of the hedge instrument is temporarily recognized in equity under the caption equity valuation adjustments until the forecasted transactions occur, when that portion is recognized in the income statement, The non-effective portion of the variation in the value of foreign exchange hedge derivatives is recognized directly in the income statement, As of September 30, 2020 and December 31, 2019, no results were recorded for the ineffective portion,

Bank

09/30/2020

12/31/2019

Strategies

Adjustment to Fair Value

Accounting Value

Notional

Adjustment to Fair Value

Accounting Value

Notional

Market Risk Hedge

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

Swap Contracts

48,279 

(39,500)

4,559,079 

5,403,057 

5,185,954 

123,791 

601,119 

1,447,179 

2,336,460 

2,241,894 

1,735,341 

1,420,344 

Credit Operations Hedge

(753,744) 

(24,121) 

199,198 

168,134 

1,637,032 

118,123 

60,414 

895,584 

1,254,893 

1,146,503 

1,194,479 

876,548 

Securities Hedge

802,023 

(15,378) 

4,359,881 

5,234,923 

3,548,922 

5,668 

540,705 

551,594 

1,081,567 

1,095,391 

540,862 

543,796 

Futures Contracts

2,385,793 

50,350,239 

54,928,412 

47,171,371 

3,000,490 

48,427,614 

36,569,735 

45,854,445 

Securities Hedge

2,385,793 

50,350,239 

54,928,412 

47,171,371 

3,000,490 

48,427,614 

36,569,735 

45,854,445 

Cash Flow Hedge

Swap Contracts

1,525,866 

1,550,064 

1,171,860 

5,668 

602,634 

504,512 

889,117 

2,056,007 

1,735,341 

Credit Operations Hedge

56,887 

294,403 

687,239 

738,262 

1,194,479 

Securities Hedge

1,525,866 

1,550,064 

1,171,860 

5,668 

545,747 

210,109 

201,878 

1,317,745 

540,862 

Futures Contracts

46,472,443 

40,082,944 

43,203,957 

17,726,566 

18,680,868 

3,219,566 

789,631 

Credit Operations Hedge (2) (3)

25,543,341 

21,020,406 

22,859,369 

14,506,878 

15,195,149 

Securities Hedge

20,929,102 

19,062,538 

20,344,589 

3,219,688 

3,485,719 

3,219,566 

789,631 

 

Consolidated

09/30/2020

12/31/2019

Strategies

Adjustment to Fair Value

Accounting Value

Notional

Adjustment to Fair Value

Accounting Value

Notional

Market Risk Hedge

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

 Objects (1)

 Instruments (1)

Swap Contracts

48,271 

(39,487)

4,559,368 

5,516,479 

5,185,954 

123,791 

602,633 

1,283,074 

3,208,463 

4,227,057 

2,605,830 

3,249,742 

Credit Operations Hedge

(753,752) 

(24,109) 

199,487 

168,147 

1,637,032 

118,123 

56,887 

585,670 

2,021,557 

1,398,121 

1,964,670 

1,118,210 

Securities Hedge

802,023 

(15,378) 

4,359,881 

5,348,332 

3,548,922 

5,668 

545,747 

697,404 

1,186,907 

2,828,936 

641,160 

2,131,532 

Futures Contracts

2,385,793 

50,350,239 

54,928,412 

47,171,371 

3,000,490 

48,427,614 

36,569,735 

45,427,125 

789,631 

Securities Hedge

2,385,793 

50,350,239 

54,928,412 

47,171,371 

3,000,490 

48,427,614 

36,569,735 

45,427,125 

789,631 

Cash Flow Hedge

Swap Contracts

6,744,097 

7,728,501 

6,166,485 

5,163,218 

7,123,421 

7,460,858 

5,499,281 

5,624,154 

Credit Operations Hedge

3,494 

977,621 

1,058,007 

687,239 

90,518 

Securities Hedge

1,550,064 

1,525,866 

1,171,860 

210,109 

1,201,878 

1,317,745 

198,415 

1,107,636 

Funding Hedge

5,194,033 

6,202,634 

4,994,625 

4,949,615 

4,943,922 

5,085,106 

4,613,628 

4,426,000 

Futures Contracts

40,082,944 

46,529,881 

43,203,957 

7,726,566 

54,460,972 

54,194,819 

4,501,878 

Credit Operations Hedge (2) (3)

21,020,406 

25,543,341 

22,859,369 

4,506,878 

50,975,253 

50,975,253 

4,501,878 

Securities Hedge

19,062,538 

20,986,540 

20,344,589 

3,219,688 

3,485,719 

3,219,566 

(*) The Bank operates some Cash Flow Hedge strategies, hedging assets from its portfolio (object), regards that, the table is presented showing the liability amounts from the respective instruments, For structures whose objects are futures, the table is presented showing the balance of the daily adjustment, registered in the suspense accounts,

(1) Credit amounts refer to active operations and operations owed to passive operations,

(2) Updated value of the instruments on September 30, 2020 is R$8,293,988 (12/31/2019 - R$8,425,386),

 

Bank

Consolidated

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Up to 3

From 3 to

Over

Up to 3

From 3 to

Over

Strategies

Months

12 Months

12 Months

Total

Total

Months

12 Months

12 Months

Total

Total

Market Risk Hedge

Swap Contracts

64,129 

5,263,551 

114,877 

5,442,557 

1,420,344 

177,537 

5,263,551 

114,877 

5,555,965 

3,249,741 

Credit Operations Hedge

64,129 

13,250 

114,877 

192,255 

876,548 

64,129 

13,250 

114,877 

192,256 

1,118,210 

Securities Hedge

5,250,301 

5,250,301 

543,796 

113,408 

5,250,301 

5,363,709 

2,131,532 

Futures Contracts

9,025,400 

15,852,495 

30,050,517 

54,928,412 

789,631 

9,025,400 

15,852,495 

30,050,517 

54,928,412 

789,631 

Securities Hedge

9,025,400 

15,852,495 

30,050,517 

54,928,412 

789,631 

9,025,400 

15,852,495 

30,050,517 

54,928,412 

789,631 

Cash Flow Hedge

Swap Contracts

1,550,064 

1,550,064 

1,245,735 

1,550,064 

1,550,064 

6,327,615 

Credit Operations Hedge

138,099 

435,872 

Hedge de Títulos e Valores Mobiliários

1,550,064 

1,550,064 

1,107,636 

1,550,064 

1,550,064 

1,107,636 

Securities Hedge

4,784,106 

Funding Hedge

597,463 

39,485,481 

40,082,944 

54,460,972 

597,463 

39,485,481 

40,082,944 

54,460,972 

Credit Operations Hedge (2) (3)

21,020,406 

21,020,406 

50,975,253 

21,020,406 

21,020,406 

50,975,253 

Securities Hedge

597,463 

18,465,075 

19,062,538 

3,485,719 

597,463 

18,465,075 

19,062,538 

3,485,719 

 

At the Bank and Consolidated, the mark-to-market effect of swap and future asset contracts corresponds to a credit in the amount of R$11,528 (12/31/2019 - R$11,063) and is recorded in shareholders' equity, net of tax effects, of which R$6,340 will be realized against revenue in the next twelve months,

V) Credit Derivatives Information

Banco Santander uses credit derivatives with the objectives of performing counterparty risk management and meeting its customers' demands, performing protection purchase and sale transactions through credit default swaps and total return swaps, primarily related to Brazilian sovereign risk securities,

Total Return Swaps – TRS

Credit derivatives refer to the exchange of the return of the reference obligation by a cash flow and in which, in the event of a credit event, the protection buyer is usually entitled to receive from the protection seller the equivalent of the difference between the restated amount and the fair value (market value) of the reference obligation on the settlement date of the agreement,

Credit Default Swaps – CDS

These are credit derivatives where, in the event of a credit event, the protection buyer is entitled to receive from the protection seller the equivalent of the difference between the face value of the CDS agreement and the fair value (market value) of the reference obligation on the settlement date of the contract, In return, the seller receives compensation for the sale of the protection,

Below, the composition of the Credit Derivatives portfolio shown by its reference value and effect in the calculation of Required Stockholders' Equity,

Bank/Consolidated

Valor Nominal

09/30/2020

12/31/2019

Retained Risk - Total Rate of Return Swap

Transferred Risk - Credit Swap

Retained Risk - Total Rate of Return Swap

Transferred Risk - Credit Swap

Credit Swaps

3,408,853 

2,435,880 

Total

3,408,853 

2,435,880 

Amount related to the premium paid on CDS for use as guarantee (risk transfer) in the amount of R$0 (12/31/2019 - R$0),

The effect on the PLE of the risk received was R$11,611 (12/31/2019 - R$5,257),

During the period there was no occurrence of a credit event related to taxable events provided for in the contracts,

09/30/2020

12/31/2019

Maximum Potential for Future Payments - Gross

Over 12 Months

Total

Over 12 Months

Total

Per Instrument: CDS

3,408,853 

3,408,853 

2,435,880 

2,435,880 

Per Risk Classification: Below Investment Grade

3,408,853 

3,408,853 

2,435,880 

2,435,880 

Per Reference Entity: Brazilian Government

3,408,853 

3,408,853 

2,435,880 

2,435,880 

 

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

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Financial Literature of the Treasury - LFT

415,226 

5,342,992 

1,029,143 

5,950,561 

National Treasury Bills - LTN

7,430,739 

1,086,556 

7,433,795 

1,086,556 


National Treasury Notes - NTN

2,485,999 

660,918 

2,669,168 

841,790 

Total

10,331,964 

7,090,465 

11,132,106 

7,878,907 


 


7.     Interbank Accounts

The amount of interbank accounts is composed of restricted deposits with the Bacen to meet compulsory obligations for demand deposits, savings deposits and time deposits, and payments and receipts pending settlement, represented by checks and other documents sent to clearinghouses payment transactions (assets and liabilities position),

8.     Loan Portfolio and Allowance for Loan Losses

a) Loan Portfolio

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Lending Operations

276,197,102 

211,251,830 

331,809,467 

280,899,334 

Loans and Discounted Titles

174,396,766 

116,282,045 

173,887,437 

130,994,834 

Financing

45,528,552 

42,287,183 

101,650,246 

97,221,898 

Rural and Agroindustrial - Financing

13,393,697 

12,940,784 

13,393,697 

12,940,784 

Real Estate Financing

42,878,087 

39,741,818 

42,878,087 

39,741,818 

Leasing Operations

2,453,343 

2,800,998 

Advances on Foreign Exchange Contracts (1)

6,654,994 

6,054,424 

6,654,994 

6,054,424 

Other Receivables (2)

53,809,023 

58,912,075 

56,444,052 

62,281,242 

Receivables for Guarantees Honored

 

591,459 

 

321,478 

 

494,098

 

328,371 

Income Receivable from Advances Granted

 

170,267 

 

97,756 

 

170,267 

 

97,756 

Debtors for Purchase of Assets

 

628,433 

 

653,347 

 

676,200 

 

653,347 

Other Receivables Several

 

52,418,864 

 

57,839,494 

 

55,006,126 

 

61,201,768 

Total

336,661,119 

276,218,329 

397,361,856 

352,035,998 

(1) Advance on foreign exchange contracts are classified as a reduction of other obligations,

(2) Comprise receivables for guarantees honored other receivables - others (granted to borrowers to purchase securities, assets, notes and receivable - Note 10) and income receivable on foreign exchange contracts,

Sale or Transfer Operations of Financial Assets

According to CMN Resolution nº 3,533/2008 updated with later norms, the lending operations with substantial retention of risks and benefits, started from January 1, 2012 to remain registered in the loan portfolio, For lending operations made until December 31, 2011, regardless of the retention or transfer of substantial risks and benefits, financial assets were written off from the record of the original operation and the result recorded in the transfer to the appropriate result,

(i) With Substantial Transfer of Risks and Benefits

In the Bank and Consolidated, during period ended at September 30, 2020, operations were carried out credit assignment without co-obligation in the amount of R$1,022,593 (12/31/2019 - R$2,986,361) and were recorded substantially in borrowings and discounted securities, classified at risk level E and F, In the first quarter of 2020, there were no assignments between Group entities (12/31/2019 - R$746,106),

During the period ended September 30, 2020, loan assignments were made in full without co-obligation, in the amount of R$725,100 in the Bank and in the Consolidated relating to loan losses, In the third quarter of 2020, there were no assignments between Group entities

(ii) With Substantial Retention of Risks and Benefits

On December 2011, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$688,821, which fall due until October 2041, On September 30, 2020, the present value of the divested operations is R$194,568 (12/31/2019- R$75,833),

These assignment operations were carried out with a co-obligation clause, and compulsory repurchase is envisaged in the following situations:

·         Contracts in default for a period exceeding 90 consecutive days;

·         Contracts subject to renegotiation;

·         Contracts subject to portability in accordance with CMN Resolution nº 3,401/2006; and

·         Contracts subject to intervention,

The compulsory repurchase price will be calculated by unpaid balance of the loan due date at the time of its repurchase,

From the date of transfer, cash flows from operations will be paid directly to the assignee entity,

 

 

b) Loan Portfolio by Maturity

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Overdue

5,306,683 

7,684,024 

5,615,045 

8,585,560 

Due to:

Up to 3 Months

74,985,407 

76,147,368 

82,075,227 

87,843,597 

From 3 to 12 Months

91,352,570 

69,667,171 

110,528,508 

90,380,199 

Over 12 Months

165,016,459 

122,719,766 

199,143,076 

165,226,642 

Total

336,661,119 

276,218,329 

397,361,856 

352,035,998 

 

c) Loan Portfolio by Business Sector

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Private Sector

335,621,423 

275,100,366 

396,320,893 

350,916,654 

Industry

65,628,907 

53,728,646 

66,514,611 

54,671,234 

Commercial

43,862,849 

33,864,887 

47,926,946 

39,183,683 

Financial Institutions

1,534,911 

1,983,283 

1,589,242 

1,991,233 

Services and Other (1)

56,684,960 

41,607,698 

58,955,727 

44,886,880 

Individuals

163,307,646 

140,385,489 

216,670,128 

206,623,415 

Credit Cards

33,374,543 

34,914,437 

33,374,543 

34,914,437 

Mortgage Loans

40,896,556 

37,218,524 

40,896,556 

37,218,524 

Payroll Loans

45,705,261 

27,941,932 

45,705,261 

42,446,859 

Financing and Vehicles Lease

2,157,844 

2,379,093 

53,552,487 

51,774,184 

Others (2)

41,173,442 

37,931,503 

43,141,281 

40,269,411 

Agricultural

4,602,150 

3,530,363 

4,664,239 

3,560,209 

Public Sector

1,039,696 

1,117,964 

1,040,963 

1,119,344 

State

415,046 

441,599 

415,046 

441,599 

Municipal

624,650 

676,365 

625,917 

677,745 

Total

336,661,119 

276,218,330 

397,361,856 

352,035,998 

(1) Includes the activities of mortgage companies - business plan, transportation services, health, personal and others,

(2) Includes personal loans, overdraft among others,


d) Classification of Loan Portfolio and Respective Allowance for Loan Losses by Risk Level

Bank

09/30/2020

12/31/2019

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% 

159,534,917 

159,534,917 

121,753,569 

121,753,569 

A

0,5% 

95,080,014 

95,080,014 

-        475,400

-        291,475

-        766,875

77,795,391 

77,795,391 

388,977 

388,977 

B

1,0% 

28,348,825 

2,038,965 

30,387,790 

-        303,878

-        521,071

-        824,949

23,816,916 

2,120,722 

25,937,638 

259,376 

17 

259,393 

C

3,0% 

20,356,272 

1,994,776 

22,351,048 

-        670,531

-     1,421,557

-     2,092,088

19,823,183 

1,966,467 

21,789,650 

653,690 

1,665 

655,355 

D

10,0% 

8,190,887 

2,134,147 

10,325,034 

-     1,032,503

-     1,808,441

-     2,840,944

7,926,118 

2,088,778 

10,014,896 

1,001,490 

1,547,683 

2,549,173 

30,0% 

2,450,512 

1,588,228 

4,038,740 

-     1,211,622

-        669,734

-     1,881,356

2,266,765 

2,323,208 

4,589,973 

1,376,992 

659,874 

2,036,866 

F

50,0% 

2,112,682 

1,384,924 

3,497,606 

-     1,748,803

-        574,029

-     2,322,832

1,769,671 

1,475,413 

3,245,084 

1,622,542 

447,224 

2,069,766 

G

70,0% 

1,957,862 

1,167,022 

3,124,884 

-     2,187,418

-        723,133

-     2,910,551

1,450,313 

1,225,377 

2,675,690 

1,872,983 

418,317 

2,291,300 

H

100,0% 

3,517,099 

4,826,913 

8,344,012 

-     8,344,012

-     8,344,012

2,734,332 

5,676,805 

8,411,137 

8,411,137 

8,411,137 

Total

321,549,070 

15,134,975 

336,684,045 

-   15,974,167

-     6,009,440

-   21,983,607

259,336,258 

16,876,770 

276,213,028 

15,587,187 

3,074,780 

18,661,967 

Consolidated

09/30/2020

12/31/2019

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% 

171,882,404 

171,882,404 

141,210,954 

-          23,199

141,187,755 

A

0,5% 

130,896,989 

130,896,989 

-        654,485

-        312,239

-        966,724

120,434,015 

120,434,015 

602,170 

20,772 

622,942 

B

1,0% 

33,619,965 

2,937,412 

36,557,377 

-        365,574

-        533,153

-        898,727

29,095,941 

3,746,497 

32,842,438 

328,424 

18 

328,442 

C

3,0% 

21,818,722 

2,968,419 

24,787,141 

-        743,614

-     1,557,322

-     2,300,936

21,140,394 

3,371,115 

24,511,509 

735,345 

1,664 

737,009 

D

10,0% 

8,763,775 

2,640,353 

11,404,128 

-     1,140,413

-     1,997,551

-     3,137,964

8,368,581 

2,820,515 

11,189,096 

1,118,910 

1,547,683 

2,666,593 

30,0% 

2,623,852 

2,165,875 

4,789,727 

-     1,436,918

-        772,005

-     2,208,923

2,332,530 

2,835,000 

5,167,530 

1,550,259 

659,875 

2,210,134 

F

50,0% 

2,238,324 

1,737,554 

3,975,878 

-     1,987,939

-        655,501

-     2,643,440

1,859,486 

1,812,213 

3,671,699 

1,835,850 

447,224 

2,283,073 

G

70,0% 

2,043,836 

1,354,900 

3,398,736 

-     2,379,116

-        772,441

-     3,151,557

1,482,247 

1,458,609 

2,940,856 

2,058,599 

418,318 

2,476,917 

H

100,0% 

3,814,434 

5,877,968 

9,692,402 

-     9,692,402

-     9,692,402

2,943,753 

7,139,229 

10,082,982 

10,082,982 

10,082,982 

Total

377,702,301 

19,682,481 

397,384,782 

-   18,400,461

-     6,600,212

-   25,000,673

328,867,901 

23,159,979 

352,027,880 

18,312,539 

3,095,554 

21,408,092 

(1) Includes installments falling due and overdue,

(2) The additional provision is constituted based mainly on the expectation of realization of the loan portfolio, in addition to the minimum required by the current regulation,

(3) The total loan portfolio includes the amount of R$ 22,926 (12/31/2019 - R$ 5,301) in the Bank and R$ 22,926 (12/31/2019 - R$ 8,118) in Consolidated, referring to the adjustment to market value credit operations that are subject to protection, registered in accordance with article 5 of Bacen Circular Letter 3,624 of December 26, 2013 and which are not included in the note on risk levels,


e) Changes in Allowance for Loan Losses

Bank

Consolidated

01/01 a 09/30/2020

01/01 a 09/30/2019

01/01 a 09/30/2020

01/01 a 09/30/2019

Opening Balance

18,661,967 

16,734,154 

21,408,092 

18,789,123 

Allowances Recognized

10,719,910 

7,867,982 

13,501,276 

9,696,720 

Write-offs

(7,398,270) 

(9,079,788) 

(9,908,695) 

(10,244,718) 

Closing Balance

21,983,607 

15,522,348 

25,000,673 

18,241,125 

Recoveries Credits (1)

1,782,654 

1,661,458 

2,060,762 

1,606,698 

 

f) Renegotiated Credits

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Renegotiated Credits

18,385,558 

13,752,395 

22,911,566 

16,292,323 

Allowance for Loan Losses

(9,183,573) 

(7,525,483) 

(10,053,828) 

(8,283,230) 

Percentage of Coverage on Renegotiated Credits

49.9% 

54.7% 

43.9% 

50.8% 

 

g) Loan Portfolio Concentration

Consolidated

09/30/2020

12/31/2019

Loan Portfolio and Credit Guarantees (1), Securities (2) and Derivatives Financial Instruments (3)

Risk

 % 

Risk

 % 

Largest Debtor

6,417,066 

1.4% 

4,207,082 

0.9% 

10 Largest

34,563,152 

7.2% 

30,837,795 

6.9% 

20 Largest

53,971,068 

10.9% 

48,360,114 

10.9% 

50 Largest

88,308,671 

17.7% 

78,111,867 

17.6% 

100 Largest

117,122,122 

23.7% 

102,168,739 

23.0% 

(1) Includes installments of credit to builders/developers,

(2) Refers to debentures, promissory notes and certificates of real estate receivables – CRI,

(3) Refers to credit of derivatives risk,

 

9.     Tax Assets and Liabilities

a) Tax Credits

a,1) Nature and Origin of Recorded Deferred Tax Assets

 

Bank

Balances on

Balances on

12/31/2019

Recognition (4)

Realization

09/30/2020

Allowance for Loan Losses

14,047,657 

4,756,015 

(2,039,328) 

16,893,569 

Reserve for Legal and Administrative Proceedings - Civil

1,503,264 

465,625 

(256,345) 

1,738,419 

Reserve for Tax Risks and Legal Obligations

1,541,030 

159,154 

(155,538) 

1,544,684 

Reserve for Legal and Administrative Proceedings - Labor

2,249,941 

564,037 

(508,265) 

2,307,363 

Agio

56,746 

56,746 

Adjustment to Fair Value of Trading Securities and Derivatives (1)

2,092,265 

821,392 

(1,148,582) 

1,765,075 

Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1)

76,976 

227,068 

304,044 

Accrual for Pension Plan (2)

1,882,812 

145,654 

(738,056) 

1,290,410 

Profit Sharing, Bonuses and Personnel Gratuities

436,935 

583,823 

(678,748) 

346,825 

Other Temporary Provisions (3)

3,881,291 

(468,592) 

3,412,699 

Total Tax Credits on Temporary Differences

27,712,171 

7,779,514 

(5,993,454)

29,659,834 

Tax Losses and Negative Social Contribution Bases

11,874,616 

11,874,616 

Social Contribution Tax - Executive Act 2,158/2001

362,240 

(187,082) 

175,158 

Balance of Recorded Deferred Tax Assets

28,074,411 

19,654,130 

(6,180,536)

41,709,608 

 

 

 

 

 

 

 

Consolidated

Balances on

Balances on

12/31/2019

Recognition (4)

Realization

09/30/2020

Allowance for Loan Losses

15,961,619 

5,742,107 

(2,608,210) 

19,224,741 

Reserve for Legal and Administrative Proceedings - Civil

1,617,815 

513,104 

(328,757) 

1,828,037 

Reserve for Tax Risks and Legal Obligations

2,367,353 

190,190 

(177,361) 

2,380,220 

Reserve for Legal and Administrative Proceedings - Labor

2,388,470 

585,694 

(538,300) 

2,437,514 

Agio

56,746 

56,746 

Adjustment to Fair Value of Trading Securities and Derivatives (1)

2,095,470 

838,520 

(1,151,029) 

1,782,961 

Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1)

153,977 

235,548 

(2) 

389,523 

Accrual for Pension Plan (2)

1,897,061 

146,805 

(747,106) 

1,296,760 

Profit Sharing, Bonuses and Personnel Gratuities

496,819 

638,290 

(748,629) 

391,295 

Other Temporary Provisions (3)

4,155,209 

140,718 

(540,785) 

3,755,142 

Total Tax Credits on Temporary Differences

31,133,793 

9,087,722 

(6,840,179)

33,542,939 

Tax Losses and Negative Social Contribution Bases

408,338 

11,876,397 

(109,090) 

12,175,645 

Social Contribution Tax - Executive Act 2,158/2001

362,240 

(187,082) 

175,158 

Balance of Recorded Deferred Tax Assets

31,904,371 

20,964,119 

(7,136,351)

45,893,742 

(1)  Includes tax credits IRPJ, CSLL, PIS and Cofins,

(2)  Includes tax credits IRPJ and CSLL, adjustments on plan benefits to employees as mentioned,

(3)  Composed mainly by administrative provisions nature,

(4)  Includes the effects of the change in the CSLL rate for banks of any kind, in accordance with Constitutional Amendment 103/19,

 

On September, 2020, there are deferred tax assets not registered in assets in the amount of R$ 6,169 (12/31/2019 - R$209,771) in the Consolidated, whose expectation of achievement exceeds 10 years,

The accounting record of the deferred tax assets in the Santander Brasil financial statements was made at the rates applicable to the expected period of its realization and is based on the projection of future results and a technical study prepared pursuant to CMN Resolution nº 3,059/2002, with the amendments to the Resolution CMN nº 4,441/2015

a,2) Expected Realization of Recorded Tax Credits

Bank

09/30/2020

Temporary Differences

Tax Loss - Carryforwards

Total

Year

IRPJ

CSLL

PIS/Cofins

CSLL 18%

Recorded

2020 

1,280,551 

1,038,975 

24,345 

2,074,467 

4,418,338 

2021 

4,913,004 

3,964,426 

97,379 

1,289,827 

175,158 

10,439,794 

2022 

4,717,471 

3,796,047 

97,379 

997,388 

9,608,285 

2023 

3,457,944 

2,782,908 

73,035 

1,735,908 

8,049,795 

2024 

1,083,669 

809,514 

2,678,174 

4,571,357 

2025 a 2027

470,744 

376,595 

3,098,852 

3,946,191 

2028 a 2029

295,278 

257,363 

552,641 

2030 

 

68,448 

 

54,759 

 

 

 

 

123,207 

Total

16,287,109 

13,080,587 

292,138 

11,874,616 

175,158 

41,709,608 

Consolidated

09/30/2020

Temporary Differences

Tax Loss - Carryforwards

Total

Year

IRPJ

CSLL

PIS/Cofins

CSLL 18%

Recorded

2020 

1,452,586 

1,139,387 

24,934 

2,117,540 

4,734,447 

2021 

5,561,261 

4,344,555 

99,734 

1,360,916 

175,158 

11,541,624 

2022 

5,317,590 

4,154,631 

99,734 

1,025,008 

10,596,963 

2023 

3,937,135 

3,069,267 

74,818 

1,759,275 

8,840,495 

2024 

1,608,038 

1,092,976 

68 

2,678,818 

5,379,900 

2025 a 2027

480,113 

379,629 

205 

3,175,713 

4,035,660 

2028 a 2029

313,521 

269,106 

189 

58,375 

641,191 

2030 

 

68,636 

 

54,826 

 

 

 

 

123,462 

Total

18,738,880 

14,504,377 

299,682 

12,175,645 

175,158 

45,893,742 

 

Due to differences between accounting, tax and corporate, expected realization of tax credits should not be taken as indicative of future net income,

 

a,3) Present Value of Tax Credits

The present value of the tax credits recorded is R$ 40,452,130 (12/31/2019 - R$25,724,592) in the Bank and R$ 44,496,054 (12/31/2019 - R$29,133,062) in the Consolidated, calculated according to with the expectation of realizing the temporary differences, tax loss carryforwards, negative social contribution tax, Social Contribution 18% - MP 2,158/2001 and the average funding rate, projected for the corresponding periods,

b) Other Liabilities - Tax and Social Security

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Deferred Tax Liabilities

4,498,180 

5,444,706 

5,127,701 

6,013,811 

Provision for Taxes and Contributions on Income

984,773 

460,654 

Taxes Payable

526,016 

1,069,765 

869,678 

1,817,392 

Total

5,024,196 

6,514,471 

6,982,152 

8,291,857 

 

b,1) Nature and Origin of Deferred Tax Liabilities

 

Bank

Balances on

Balances on

12/31/2019

Recognition

Realization

09/30/2020

Adjustment to Fair Value of Trading Securities and Derivatives (1)

1,573,996 

27,368 

1,601,364 

Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1)

3,737,329 

(964,814) 

2,772,515 

Excess Depreciation of Leased Assets

5,441 

(14) 

5,427 

Others

127,940 

14,189 

(23,254) 

118,875 

Total

5,444,706 

41,557 

(988,082)

4,498,181 

Consolidated

Balances on

Balances on

12/31/2019

Recognition

Realization

09/30/2020

Adjustment to Fair Value of Trading Securities and Derivatives (1)

1,686,421 

65,783 

(5,307) 

1,746,897 

Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1)

3,807,649 

10,338 

(989,935) 

2,828,052 

Excess Depreciation of Leased Assets

318,240 

29,486 

(8,236) 

339,490 

Others

201,501 

43,752 

(31,991) 

213,262 

Total

6,013,811 

149,359 

(1,035,469)

5,127,701 

(1) Includes IRPJ, CSLL, PIS and Cofins

 

b,2) Expected Realization of Deferred Tax Liabilities

 

Bank

9/30/2020

Temporary Differences

Total

Year

IRPJ

CSLL

PIS/Cofins

Recorded

2020 

184,801 

147,474 

35,639 

367,914 

2021 

739,204 

589,898 

142,554 

1,471,656 

2022 

739,204 

589,898 

142,554 

1,471,656 

2023 

556,057 

443,742 

106,915 

1,106,714 

2024 

6,614 

5,273 

11,887 

2025 a 2027

19,843 

15,819 

35,662 

2028 a 2029

13,229 

10,546 

23,775 

2030 

 

4,962 

 

3,955 

 

 

8,917 

Total

2,263,914 

1,806,605 

427,662 

4,498,181 

 

 

 

 

 

 

 

Consolidated

9/30/2020

Temporary Differences

Total

Year

IRPJ

CSLL

PIS/Cofins

Recorded

2020 

289,264 

156,721 

36,054 

482,039 

2021 

882,598 

621,157 

144,217 

1,647,972 

2022 

828,403 

621,157 

144,217 

1,593,777 

2023 

631,761 

467,449 

108,277 

1,207,487 

2024 

41,834 

6,323 

454 

48,611 

2025 a 2027

89,162 

17,747 

1,362 

108,271 

2028 a 2029

16,613 

11,954 

1,249 

29,816 

2030 

 

5,558 

 

4,170 

 

 

9,728 

Total

2,785,193 

1,906,678 

435,830 

5,127,701 

 

c) Income Tax and Social Contribution

 

Bank

07/01 a 09/30/2020

01/01 a 09/30/2020

07/01 a 09/30/2019

01/01 a 09/30/2019

Income Before Taxes on Income and Profit Sharing

4,190,742 

(3,004,345)

2,536,745 

12,693,790 

Profit Sharing (1)

(411,331) 

(1,291,581) 

(420,684) 

(1,262,362) 

Unrealized Income

Income Before Taxes

3,779,411 

(4,295,926)

2,116,061 

11,431,428 

Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (3)

(1,700,735)

1,933,166 

(846,424)

(4,572,571)

Equity in Subsidiaries (2)

186,768 

1,006,768 

220,548 

864,167 

Nondeductible Expenses, Net of Non-Taxable Income

38,027 

29,221 

467,344 

1,257,431 

Exchange Variation - Foreign Branches

986,571 

9,032,479 

1,526,223 

1,323,811 

Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises

43,254 

503,511 

115,792 

142,815 

Interest on Capital

346,500 

733,500 

Effects of Change in Rate of CSLL (3)

Other Adjustments Social Contribution Taxes 5% (4)

56,791 

Other Adjustments, Including Profits Provided Abroad

64,131 

687,295 

34,206 

58,316 

Income and Social Contribution Taxes

(35,484)

13,982,731 

1,517,689 

(926,031)

 

Consolidated

07/01 a 09/30/2020

01/01 a 09/30/2020

07/01 a 09/30/2019

01/01 a 09/30/2019

Income Before Taxes on Income and Profit Sharing

4,709,588 

(1,520,174)

2,908,051 

14,176,041 

Profit Sharing (1)

(457,730) 

(1,421,238) 

(469,896) 

(1,395,158) 

Unrealized Income

8,341 

68,209 

28,262 

44,523 

Income Before Taxes

4,260,200 

(2,873,202)

2,466,418 

12,825,406 

Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (5)

(1,917,090)

1,292,941 

(986,567)

(5,130,162)

Equity in Subsidiaries (2)

6,926 

11,223 

5,353 

14,041 

Nondeductible Expenses, Net of Non-Taxable Income

43,280 

47,416 

493,255 

1,395,088 

Exchange Variation - Foreign Branches

986,571 

9,032,479 

1,526,223 

1,323,811 

Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises

38,244 

544,467 

116,132 

176,984 

Interest on Capital

333,000 

733,500 

Effects of Change in Rate of CSLL (3)

64,671 

237,565 

37,712 

91,455 

Other Adjustments Social Contribution Taxes 5%

(9,122) 

63,374 

Other Adjustments, Including Profits Provided Abroad

40,895 

690,282 

66,853 

51,351 

Income and Social Contribution Taxes

(412,625)

12,653,247 

1,258,960 

(2,077,432)

(1)  The basis of calculation is the net income, after IR and CSLL,

(2)  As a result of equity in subsidiaries are not included interest on capital received and receivable,

(3)  Effect of rate differences for the other non-financial companies, which the social contribution tax rate is 9% and 15%,

(4)  Increase in the CSLL rate, as of March 2020, for an indefinite period,

 

 

Foreign Exchange Hedge of the Grand Cayman Branch, Luxembourg Branch and the Subsidiary Santander Brasil EFC

Banco Santander operates two branchs, one in the Cayman Islands and one in Luxembourg, and a subsidiary called Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” (independent subsidiary in Spain) which are used mainly to raise funds in the capital and financial markets, providing credit lines that are extended to customers for trade-related financings and working capital (Note 11),

To protect the exposures to foreign exchange rate variations, the Bank uses derivatives and international funding, According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (real) in foreign investments are nontaxable or deductible to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible, The purpose of these derivatives are to protect the after-tax results,

Tax treatment distinct from such exchange rate differences results in volatility in "Operating Income before Taxation" and in the caption "Income Taxes", Following are the effects of the operations carried out, as well as the total effect of the Currency Hedge for the period ended in September 30, 2020 and 2019:

R$

01/01 a 09/30/2020

01/01 a 09/30/2019

Financial Operations

Result generated by the exchange rate variations on the Bank's investment in the Cayman and EFC Agency

21,807,261 

3,525,929 

Result generated by derivative contracts used as hedge

(40,098,666) 

(5,994,824) 

Tax Expenses

Tax effect of derivative contracts used as hedge - PIS/COFINS

772,189 

57,168 

Income Tax and Social Contribution

Tax effect of derivative contracts used as hedge - IR/CS

17,519,216 

2,411,727 

(1)  The basis of calculation is the net income, after IR and CSLL,

 

10.   Other Receivables – Other

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Notes and Credits Receivable (Note 8,a)

  Credit Cards

27,183,198 

28,854,952 

27,183,198 

28,973,079 

  Receivables (1)

25,235,667 

28,984,542 

27,822,928 

31,820,361 

Escrow Deposits for:

Tax Claims

5,809,101 

5,644,233 

7,611,533 

7,445,344 

Labor Claims

2,053,698 

2,022,832 

2,249,315 

2,208,429 

Others - Civil

1,134,586 

1,057,348 

1,370,385 

1,319,644 

Contract Guarantees - Former Controlling Stockholders (Note 17,i)

103,829 

103,272 

103,828 

103,272 

Recoverable Taxes

2,173,399 

2,238,982 

3,159,345 

3,320,147 

Receivables - Buyer Services

Reimbursable Payments

224,475 

196,039 

285,901 

225,380 

Salary Advances/Others

(2,032,370) 

100,128 

(1,917,429) 

325,185 

Employee Benefit Plan

262,903 

283,046 

323,632 

346,422 

Debtors for Purchase of Assets (Note 7,a)

628,433 

653,347 

676,199 

713,936 

Receivable from Affiliates

20,149 

44,457 

9,578 

18,842 

Others

3,361,206 

1,284,510 

6,411,029 

3,015,028 

Total

66,158,274 

71,467,688 

75,289,442 

79,835,069 

(1) It consists of operations with credit assignment characteristics substantially composed of "Confirming" operations with companies subject to credit risk and analysis of loan losses by segment in accordance with the Bank risk policies,

 

11.   Dependences Information and Foreign Subsidiary

Branches:                                                                                                                                                                          

Cayman                                               

The Grand Cayman Agency is licensed under the Banks and Fiduciary Companies Act and is duly registered as a Foreign Company with the Registrar of Companies in Grand Cayman, Cayman Islands, The agency is therefore duly authorized to carry out banking business in the Cayman Islands and is currently engaged in fund raising business in the international banking and capital market to provide credit lines to Banco Santander, which are then extended to Banco Santander clients' for financing working capital and foreign trade, It also receives deposits in foreign currency from corporate clients and individuals and provides credit to Brazilian and foreign clients, primarily to support commercial operations with Brazil,

Luxembourg

On June 9, 2017, Banco Santander obtained authorization from the Brazilian Central Bank to set up an agency in Luxembourg with a capital of US$1 billion, with the objective of complementing the foreign trade strategy for corporate clients (large Brazilian companies and their operations abroad) and offer financial products and services through an offshore entity that is not established in a jurisdiction with favored taxation and that allows for the increase of funding capacity, The opening of the agency was authorized by the Minister of Finance of Luxembourg on March 5, 2018, On April 3, 2018, after the reduction of the capital of the Cayman Agency in the equivalent amount, the value of US$1 billion was allocated to capital of the Luxembourg branch,

Subsidiary:

Banco Santander has a subsidiary in Spain, Santander Brasil, Establecimiento Financiero de Credito, S,A, (Santander Brasil EFC), to complement the foreign trade strategy for corporate clients - large brazilian companies and their operations abroad - and offer products and financial services through an offshore entity that is not established in a jurisdiction with favored taxation,

The summarized financial position of dependency and foreign subsidiary, converted at the exchange rate prevailing at balance sheet date in the financial statements include (without eliminating transactions with related parties):

Grand Cayman Branch (3)

Luxembourg Branch (3)

Santander Brasil EFC (3)

 

 

 

9/30/2020

12/31/2019

9/30/2020

12/31/2019

9/30/2020

12/31/2019

Assets

193,864,738 

124,944,302 

43,277,801 

19,955,679 

5,396,333 

3,850,302 

Current and Long-term Assets

193,864,738 

124,944,302 

43,277,481 

19,955,392 

5,396,333 

3,850,302 

Cash

3,001,709 

3,205,293 

2,370,515 

162,231 

145,544 

319,152 

Interbank Investments

57,124,659 

34,116,739 

5,525,153 

1,941,192 

4,761,504 

2,582,385 

Securities and Derivatives Financial Instruments

94,284,492 

63,736,330 

4,664,281 

1,002,697 

20,726 

16,799 

Lending Operations (1)

22,994,436 

16,466,558 

26,883,016 

16,570,321 

590,941 

Foreign Exchange Portfolio

10,682,228 

4,145,245 

3,463,320 

167,985 

Others

5,777,214 

3,274,137 

371,196 

110,966 

468,559 

341,025 

Permanent Assets

320 

287 

Liabilities

193,864,738 

124,944,302 

43,277,801 

19,955,679 

5,396,333 

3,850,302 

Current and Long-term Liabilities

112,331,581 

70,332,537 

36,330,120 

15,429,041 

412,035 

303,219 

Deposits and Money Market Funding

28,473,410 

10,798,572 

5,639,593 

2,469,606 

43,450 

29,766 

Funds from Acceptance and Issuance of Securities

20,027,820 

14,999,864 

11,240,028 

6,235,813 

Debt Instruments Eligible to Compose Capital

14,473,732 

10,175,961 

Borrowings (2)

25,025,797 

24,297,747 

14,903,362 

6,318,373 

Foreign Exchange Portfolio

10,718,688 

4,120,196 

3,192,047 

168,134 

Others

13,612,134 

5,940,197 

1,355,090 

237,115 

368,585 

273,453 

Deferred Income

180 

119 

16,166 

12,331 

18 

29 

Stockholders' Equity

81,532,977 

54,611,646 

6,931,515 

4,514,307 

4,984,280 

3,547,054 

01/01 a
09/30/2020

01/01 a
09/30/2019

01/01 a
09/30/2020

01/01 a
09/30/2019

01/01 a
09/30/2020

01/01 a
09/30/2019

Net Income

2,578,250 

1,973,237 

625,983 

211,598 

1,881 

21,329 

(1)  Refers mainly to lending and export financing operations,

(2)  Borrowings abroad regarding financing lines to exports and imports and other lines of credit,   

(3)  The functional currency is Real,

 

12.   Investments in Affiliates and Subsidiaries Subsidiary

Bank

 

Adjusted Stockholders' Equity

Net Income (Loss) Adjusted

Investments Value

Equity Accounting Results

09/30/2020

01/01 a 09/30/2020

09/30/2020

12/31/2019

01/01 a 09/30/2020

01/01 a 09/30/2020

 

Controlled by Banco Santander

 

Santander Leasing

5,878,925 

138,879 

4,619,695 

4,528,041 

109,507 

46,937 

 

Banco Bandepe S,A,

5,348,678 

74,526 

5,348,678 

5,277,643 

74,526 

212,123 

 

Santander Brasil EFC

4,984,280 

1,881 

4,984,280 

3,547,055 

2,244 

21,329 

 

Santander Corretora de Seguros

3,445,108 

445,516 

3,445,108 

3,002,236 

445,516 

321,543 

 

Getnet S,A,

2,019,612 

209,970 

2,019,611 

2,611,765 

209,970 

472,941 

 

Ágio na Aquisição de Participação Residual da Getnet S,A,

14,532 

1,080,439 

Atual Serviços de Recuperação de Créditos e Meios Digitais S,A,

1,728,864 

58,275 

1,710,327 

1,322,052 

58,275 

31,461 

Aymoré CFI

1,304,398 

328,913 

1,304,398 

937,539 

328,913 

622,545 

 

Sancap

1,221,637 

268,138 

1,221,637 

1,040,469 

268,122 

105,440 

 

Banco Olé Consignado (1)

926,278 

154,380 

39,871 

 

Bosan S,A,

95,350 

59,569 

 

Ágio na Aquisição de Participação da Bosan S,A,

13 

 

51,750 

Santander CCVM

715,396 

71,329 

715,394 

646,400 

71,329 

77,831 

 

Banco RCI Brasil S,A,

1,413,087 

138,981 

563,693 

524,503 

55,441 

59,933 

 

Santander Brasil Consórcio

600,833 

175,877 

600,833 

424,956 

175,877 

151,857 

 

Others

1,441,505 

135,546 

1,183,475 

941,417 

189,697 

-114,712 

 

Total

 

 

 

 

 

27,731,674 

 

26,810,793 

 

2,239,147 

 

2,160,418 

 

 

Consolidated

Adjusted Stockholders' Equity

Net Income (Loss) Adjusted

Investments Value

Equity Accounting Results

 

09/30/2020

01/01 a 09/30/2020

09/30/2020

12/31/2019

01/01 a 09/30/2020

01/01 a 09/30/2020

Jointly Controlled Companies Directly and Indirectly

by Banco Santander

TecBan

568,308 

72,230 

107,865 

94,155 

13,709 

8,853 

Gestora de Crédito

170,804 

(67,914) 

34,161 

47,744 

(13,581) 

(7,873) 

Webmotors S,A,

218,678 

38,050 

153,075 

126,440 

26,635 

32,381 

 

 

 

Norchem Holdings

96,459 

(151) 

20,980 

21,252 

(33) 

443 

Norchem Participações

41,744 

666 

20,872 

21,080 

333 

796 

EBP

11,525 

148 

1,280 

3,889 

16 

175 

Santander Auto

31,636 

(4,711) 

15,818 

12,374 

(2,356) 

(247) 

Hyundai Corretora de Seguros Ltda,

1,959 

91 

979 

934 

46 

PSA Corretora

1,427 

347 

714 

540 

173 

373 

Others (2)

5,265 

5,266 

127 

Total

361,009 

333,674 

24,942 

35,109 

 

(1) On January 31, 2020, the purchase of the minority stake in Banco Olé Consignado SA was completed, thus, the Bank became, directly and indirectly, holder of 100% of the shares of Banco Olé (Note 2,cii),

(2) Comprised mainly of the goodwill portion allocated to Webmotors,

 

 

13.   Intangibles

Bank

09/30/2020

12/31/2019

Cost

Amortization

Net

Net

Goodwill on Acquired Companies

28,323,672 

(26,539,791)

1,783,881 

274,745 

Other Intangible Assets

9,291,408 

(5,104,970)

4,186,437 

3,777,511 

Acquisition and Development of Software

5,281,700 

(3,326,896) 

1,954,804 

1,851,076 

Exclusivity Contracts for Provision of Banking Services

3,592,055 

(1,744,141) 

1,847,914 

1,926,342 

Others

417,653 

(33,933) 

383,720 

93 

Total

37,615,080 

(31,644,762)

5,970,318 

4,052,256 

Consolidated

09/30/2020

12/31/2019

Cost

Amortization

Net

Net

Goodwill on Acquired Companies

29,513,388 

(27,586,290)

1,927,098 

1,611,812 

Other Intangible Assets

9,958,217 

(5,555,767)

4,402,451 

4,100,986 

Acquisition and Development of Software

5,855,388 

(3,704,699) 

2,150,690 

2,118,798 

Exclusivity Contracts for Provision of Banking Services

3,592,055 

(1,744,141) 

1,847,914 

1,926,342 

Others

510,774 

(106,928) 

403,847 

55,846 

Total

39,471,606 

(33,142,057)

6,329,548 

5,712,798 

(*) For the quarter ended September 30, 2020, there was no impairment,

 

 

14.   Funding

a) Opening of Equity Accounts

Bank

09/30/2020

12/31/2019

Without Maturity

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Deposits

103,112,260 

83,277,850 

105,392,655 

95,426,259 

387,309,024 

274,212,166 

Demand Deposits

43,591,258 

43,591,258 

29,392,188 

Savings Deposits

59,443,489 

59,443,489 

49,039,857 

Interbank Deposits

2,450,748 

4,090,895 

262,189 

6,803,832 

4,673,772 

Time Deposits (1)

77,513 

80,827,099 

101,301,760 

95,164,070 

277,370,442 

191,106,349 

Others

 

 

 

 

 

 

Money Market Funding

78,338,764 

12,527,494 

35,101,459 

125,967,718 

129,632,447 

Own Portfolio

70,838,790 

4,684,766 

247,138 

75,770,693 

97,387,683 

Government Securities

60,961,999 

4,679,826 

246,537 

65,888,362 

87,881,427 

Debt Securities in Issue

2,971 

1,498 

4,469 

86,595 

Others

9,873,820 

3,442 

601 

9,877,862 

9,419,661 

Third Parties

7,499,974 

7,499,974 

8,743,348 

Linked to Trading Portfolio Operations

7,842,729 

34,854,321 

42,697,050 

23,501,416 

Funds from Acceptance and Issuance of Securities

11,479,938 

28,811,002 

50,802,156 

91,093,096 

91,579,368 

Exchange Acceptances

 

 

 

100,862 

 

 

100,862 

 

 

Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes

8,407,045 

18,251,599 

30,431,690 

57,090,334 

68,716,278 

Real Estate Credit Notes - LCI (1)

2,901,756 

6,944,798 

16,316,286 

26,162,840 

24,995,265 

Agribusiness Credit Notes - LCA

2,700,431 

5,770,810 

6,591,283 

15,062,524 

14,776,877 

Treasury Bills - LF (2)

2,804,858 

5,535,991 

6,231,183 

14,572,032 

27,587,340 

Guaranteed Real Estate Credit Notes - LIG (3)

1,292,938 

1,292,938 

1,356,796 

Securities Issued Abroad

2,610,235 

9,224,293 

19,431,168 

31,265,696 

19,419,513 

Funding by Structured Operations Certificates

462,657 

1,234,247 

939,299 

2,636,203 

3,443,577 

 

 

 

Borrowings and Onlendings

53,463,781 

10,276,438 

9,186,686 

72,926,906 

57,413,704 

Foreign Borrowings

51,164,663 

8,076,492 

1,330,307 

60,571,461 

45,659,127 

Import and Export Financing Lines

43,054,192 

5,831,644 

723,747 

49,609,582 

31,794,109 

Other Credit Lines

8,110,471 

2,244,848 

606,560 

10,961,879 

13,865,018 

Domestic Onlendings

2,299,119 

2,199,947 

7,856,379 

12,355,445 

11,754,577 

Total

103,112,260 

226,660,330 

157,007,590 

190,516,564 

677,296,743 

552,837,685 

 

Consolidated

09/30/2020

12/31/2019

Without Maturity

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Deposits

102,934,924 

81,283,358 

103,751,832 

96,247,802 

384,217,916 

272,927,991 

Demand Deposits

43,413,922 

43,413,922 

29,107,534 

Savings Deposits

59,443,489 

59,443,489 

49,039,857 

Interbank Deposits

368,675 

4,000,854 

1,741,572 

6,111,101 

4,299,290 

Time Deposits (1)

77,513 

80,914,683 

99,750,978 

94,506,228 

275,249,402 

190,344,470 

Other Deposits

136,840 

Money Market Funding

71,534,177 

12,527,494 

35,101,459 

119,163,131 

123,940,990 

Own Portfolio

66,034,196 

4,684,766 

247,138 

70,966,100 

91,696,225 

Government Securities

56,157,405 

4,679,826 

246,537 

61,083,768 

82,189,969 

Debt Securities in Issue

2,971 

1,498 

4,469 

86,595 

Others

9,873,820 

3,442 

601 

9,877,862 

9,419,661 

Third Parties

5,499,981 

5,499,981 

8,743,348 

Linked to Trading Portfolio Operations

7,842,729 

34,854,321 

42,697,050 

23,501,417 

Funds from Acceptance and Issuance of Securities

10,756,853 

22,588,521 

40,203,792 

73,549,166 

85,962,615 

Exchange Acceptances

47,954 

330,763 

746,504 

1,125,221 

1,591,753 

Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes

8,909,701 

19,444,165 

32,080,068 

60,433,935 

72,211,903 

Real Estate Credit Notes - LCI (1)

2,901,756 

6,944,798 

16,316,286 

26,162,840 

24,995,265 

Agribusiness Credit Notes - LCA

2,700,431 

5,770,810 

6,591,283 

15,062,524 

14,776,877 

Treasury Bills - LF (2)

3,307,515 

6,728,557 

7,879,561 

17,915,633 

31,082,965 

Guaranteed Real Estate Credit Notes - LIG (3)

1,292,938 

1,292,938 

1,356,796 

Securities Issued Abroad

1,336,540 

1,579,345 

6,437,921 

9,353,807 

8,715,382 

Funding by Structured Operations Certificates

462,657 

1,234,247 

939,299 

2,636,203 

3,443,577 

Borrowings and Onlendings

48,702,277 

10,287,840 

9,218,413 

68,208,530 

54,879,561 

Domestic Borrowings

11,401 

31,727 

43,129 

47,388 

Foreign Borrowings

46,403,159 

8,076,492 

1,330,307 

55,809,957 

43,077,596 

Import and Export Financing Lines

43,054,192 

5,831,644 

723,747 

49,609,582 

31,794,109 

Other Credit Lines

3,348,967 

2,244,848 

606,560 

6,200,375 

11,283,487 

Domestic Onlendings

2,299,119 

2,199,947 

7,856,379 

12,355,445 

11,754,577 

Total

102,934,924 

212,276,666 

149,716,229 

180,210,924 

645,138,743 

537,711,157 

(1) Consider the maturities established in the respective applications, with the possibility of immediate withdrawal, in advance of their maturity,

(2) Letters of real estate credit are fixed income securities backed by real estate credits and guaranteed by mortgage or fiduciary alienation of real estate, As of September 30, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2026),

(3) The main characteristics of the financial bills are a minimum term of two years, a minimum nominal value of R$300 and an early redemption permit of only 5% of the amount issued, As of September 30, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2025),

(4) Guaranteed Real Estate Bills are fixed income securities backed by real estate credits guaranteed by the issuer and a pool of real estate credits apart from the other

 

At the Bank and Consolidated, the export and import financing lines are funds raised from financial institutions abroad, intended for investment in commercial exchange operations, related to discounting export bills and pre-financing for export and import, whose maturities are up to the year 2023 (12/31/2019 - until the year 2023) and are subject to financial charges, corresponding to the exchange variation plus interest that vary from 0,28% pa to 3,70% p,a (12/31/2019 - from 0,28% per annum to 3,8% p,a),

Country onlending obligations - official institutions incur financial charges corresponding to TJLP, exchange variation of the BNDES currency basket or exchange variation of the US dollar, plus interest, in accordance with the operational policies of the BNDES System,

b) Opening profit and loss accounts

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Time Deposits (1) (2)

2,271,273 

11,115,742 

4,581,337 

8,789,357 

2,554,234 

11,854,151 

4,433,438 

8,664,227 

Savings Deposits

299,101 

1,093,765 

519,766 

1,576,165 

299,101 

1,093,765 

519,766 

1,576,165 

Interbank Deposits

34,548 

135,468 

86,922 

345,081 

52,383 

177,558 

47,592 

153,164 

Money Market Funding

985,996 

5,264,892 

2,307,183 

7,864,725 

909,536 

5,122,401 

2,229,159 

7,630,744 

 

 

 

Upgrade and Provisions Interest and Pension Plans and Capitalization

36,518 

103,121 

16,409 

99,193 

Acceptance and Issuance of Securities

5,446,747 

7,841,886 

1,370,960 

27,457,838 

5,510,178 

8,024,853 

Others (3)

2,984,784 

29,584,970 

(216,289) 

433,108 

1,640,704 

2,248,460 

(176,381) 

482,392 

Total

6,575,702 

47,194,837 

12,725,666 

26,850,322 

6,863,436 

48,057,294 

12,580,161 

26,630,738 

(1) In the Bank and in the Consolidated, it includes the registration of interest in the amount of R$212,087 (2019 - R$157,770), referring to the issuance of Level I and II Eligible Debt Instrument (Note 15),

(2) Includes exchange variation expense of R$2,994,329 in the Bank and Consolidated (2019 - exchange variation expense of R$543,210 in the Bank and Consolidated),

 

15.   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

09/30/2020

12/31/2019

Debt Instruments Eligible to Compose Capital

Issuance

Maturity

Amount (Million)

Interest Rate (p,a,) (1)

Total

Total

Tier I (2)

November - 18

No Maturity (Perpetual)

$1,250 

7,25% 

7,221,222 

5,092,153 

Tier II (2)

November - 18

November - 28

$1,250 

6,13% 

7,252,510 

5,083,808 

Total

14,473,732 

10,175,961 

(1) Interest paid semi-annually, as of May 8, 2019,

(2) The issues were made through the Cayman Agency and there is no incidence of Income Tax at Source,

 

Notes have the following common characteristics:

(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand in excess of such minimum value;

(b) The Notes may be repurchased or redeemed by Banco Santander after the 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,

16.   Other Payables – Other

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Provision Technical for Capitalization Operations

2,952,947 

2,402,614 

Provision Technical for Pension Operations

1,901,721 

Payables for Credit Cards

26,351,889 

27,526,591 

36,577,358 

36,188,873 

Provision for Tax Risks and Legal Obligations (Note 22.b) (2)

4,187,242 

4,346,769 

6,488,990 

6,630,722 

Provision for Legal and Administrative Proceedings  -
  Labor and Civil (Note 22.b) (2)

6,191,274 

6,179,885 

6,626,135 

6,739,988 

Provision for Financial Guarantees (Note 21.a)

166,105 

166,105 

Employee Benefit Plans (Note 34)

3,675,541 

4,901,691 

3,725,905 

4,956,851 

Payables for Acquisition of Assets and Rights

26,817 

23,034 

26,817 

23,034 

Reserve for Tax Contingencies - Responsibility of
  Former Controllers (Note 22.i) (b)

102,977 

102,482 

102,977 

102,482 

Reserve for Legal and Administrative Proceedings - Responsibility of
   Former Controllers Stockholders (Note 22.i) (b)

852 

791 

852 

791 

Accrued Liabilities

Personnel Expenses

1,631,530 

1,697,771 

1,881,010 

1,960,884 

Administrative Expenses

374,221 

388,954 

609,988 

593,593 

Others Payments

26,381 

40,179 

165,117 

135,235 

Creditors for Unreleased Funds

2,278,386 

1,188,637 

2,278,386 

1,188,637 

Provision of Payment Services

556,849 

580,988 

556,849 

580,988 

Suppliers

856,295 

437,208 

1,138,620 

1,242,839 

Others (1)

7,914,282 

6,088,000 

13,822,214 

9,571,481 

Total

54,174,536 

53,669,085 

76,954,165 

74,386,838 

(1) Includes impacts of the exchange variation referring to Notes,

(2) In the first half of 2019, the Bank entered into an agreement with a former controller where the registered obligations became the responsibility of the Bank, with no impact on results (Notes 15 and 16,i),

 

a) Provision for Financial Guarantees                                                                                                               

 

 

The classification of the guarantees operations for the constitution of provision is based on the estimate of the involved risk, It happens due to the quality evaluation process applied to the clients and operations, using statistical model based on quantitative and qualitative information or on specialized credit analyst, which allow them to be classified according their default probabilities, based on internal and market´s objective variables (bureaus), previously identified as predictive of default probability, After this evaluation, the operations are classified according to the provisioning ratings, having as reference the CMN Resolution nº 2,682/1999, Based on the results of this analysis, amounts related to operations’ coverage are registered as provision considering the type of the guarantee, according to the requirements of CMN Resolution nº 4,512/2016,

Bank/Consolidated

09/30/2020

12/31/2019

Type of Financial Guarantee

Balance Guarantees Provided

Provision

Balance Guarantees Provided

Provision

Linked to International Merchandise Trade

628,573 

4,589 

439,507 

3,017 

Linked to Bids, Auctions, Provision of Services or Execution of Works

5,105,743 

5,174 

5,243,996 

4,426 

Linked to the Supply of Goods

1,436,941 

1,776 

1,488,371 

2,602 

Linked to the Distribution of Securities by Public Offer

340,000 

Guarantee in Legal and Administrative Proceedings of Fiscal Nature

12,006,650 

105,234 

12,934,282 

107,231 

Other Guarantees

364,387 

1,838 

276,506 

1,334 

Other Bank Guarantees

15,462,422 

28,145 

13,944,007 

37,585 

Other Financial Guarantees

6,360,457 

36,495 

3,600,051 

9,910 

Total

41,365,173 

183,251 

38,266,720 

166,105 

 

Changes in Allowances for Financial Guarantees

Bank/Consolidated

07/01 a 09/30/2020

01/01 a 09/30/2020

07/01 a 09/30/2019

01/01 a 09/30/2019

Balance at Beginning

178,469 

166,105 

175,928 

201,411 

Constitution

7,844 

33,793 

13,767 

17,207 

Reversal (1)

(3,062) 

(16,647) 

(24,579) 

(53,502) 

Balance at End

183,251 

183,251 

165,116 

165,116 

(1) Corresponds to the honored bond, change in rating and provision recorded in the allowance for doubtful accounts,

 

 

17.   Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security

a) Contingent Assets                                                                                                                                             

In the Bank and Consolidated, on September 30, 2020 and December 31, 2019, no contingent assets were registered),

b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature

Bank

Consolidated

09/30/2020

12/31/2019

09/30/2020

12/31/2019

Reserve for Tax Contingencies and Legal Obligations (Note 15)

4,187,242 

4,346,769 

6,488,990 

6,630,722 

Accrual for Legal and Administrative Proceedings - Labor and Civil (Note 15)

6,191,274 

6,179,885 

6,626,135 

6,739,988 

Labor

2,952,896 

3,216,008 

3,201,944 

3,517,431 

Civil

3,238,378 

2,963,877 

3,424,191 

3,222,557 

Total

10,378,516 

10,526,654 

13,115,125 

13,370,710 

 

c) Change in Accrual for Judicial and Administrative Proceedings and Legal Obligations

Bank

01/01 a
09/30/2020

01/01 a
09/30/2019

Tax

Labor

Civil

Tax

Labor

Civil

Balance at Beginning

4,346,769 

3,216,008 

2,963,877 

4,079,141 

3,543,801 

3,144,599 

Recognition Net of Reversal (1) (3)

(199,760) 

719,819 

463,488 

256,397 

607,735 

430,904 

Inflation Adjustment

73,518 

13,480 

161,062 

110,714 

60,742 

198,990 

Write-offs Due to Payment

(33,285) 

(996,411) 

(350,049) 

(64,250) 

(732,346) 

(516,398) 

Balance at End

4,187,242 

2,952,896 

3,238,378 

4,382,002 

3,479,932 

3,258,095 

Escrow Deposits - Other Receivables

1,549,160 

1,099,381 

720,320 

1,200,752 

1,215,198 

632,434 

Escrow Deposits - Securities

5,079 

18,504 

16,747 

10,477 

18,512 

24,336 

Total Escrow Deposits (2)

1,554,239 

1,117,885 

737,067 

1,211,229 

1,233,710 

656,770 

 

 

 

Consolidated

01/01 a
09/30/2020

01/01 a
09/30/2019

Tax

Labor

Civil

Tax

Labor

Civil

Balance at Beginning

6,630,722 

3,517,431 

3,222,557 

6,294,007 

3,829,975 

3,401,483 

Recognition Net of Reversal (1) (3)

(203,992) 

756,160 

570,942 

246,706 

666,871 

594,565 

Inflation Adjustment

106,720 

16,370 

163,409 

171,886 

76,893 

202,827 

Write-offs Due to Payment

(44,460) 

(1,088,017) 

(532,717) 

(75,306) 

(775,454) 

(658,326) 

Balance at End

6,488,990 

3,201,944 

3,424,191 

6,637,293 

3,798,285 

3,540,549 

Escrow Deposits - Other Receivables

2,636,886 

1,195,465 

728,367 

2,268,384 

1,301,502 

640,415 

Escrow Deposits - Securities

5,916 

18,504 

16,747 

11,530 

18,512 

24,336 

Total Escrow Deposits (2)

2,642,802 

1,213,969 

745,114 

2,279,914 

1,320,014 

664,751 

(1) Tax risks include the constitution of provisions for taxes related to judicial and administrative proceedings and legal obligations, recorded in tax expenses, other operating income and other operating expenses and income tax and social contribution,

(2) Refer to the amounts of deposits in guarantees, limited to the amount of the provision and do not include deposits in guarantee related to possible and / or remote contingencies and appeal deposits,

(3) In the first half of 2019, the Bank entered into an agreement with a former controller where the registered obligations became the Bank's responsibility, with no impact on the result (Notes 16 and 17,i),

 

d) Provisions for Contingent Civil, Labor, Tax and Social Security

Banco Santander and its subsidiaries are involved in lawsuits and administrative proceedings related to tax, labor, social security and civil arising in the normal course of its activities,         

The provisions were constituted based on the nature, complexity, lawsuits historic and company´s assessment of lawsuit losses based on the opinions of internal and external legal advisors, The Santander has the policy to constitute provision of full amount in risk of lawsuits who’s the result of loss assessment is probable, The legal obligation of tax and social security were fully recognized in the financial statements,           

Management understands that the provisions recorded are sufficient to meet legal obligations and losses from lawsuits and administrative proceedings as follows:

e) Lawsuits and Administrative Proceedings related to Tax and Social Security                                  

Main lawsuits and administrative proceedings related to legal obligations, tax and social security

PIS and Cofins - R$1,929,187 in the Bank and R$3,821,021 in the Consolidated (12/31/2019 - R$1,903,369 in the Bank and R$3,769,611 in the Consolidated): Banco Santander and its subsidiaries filed lawsuits seeking to eliminate the application of Law 9,718/1998, which modified the calculation basis for PIS and Cofins to cover all revenues of legal entities and not only those arising from the provision of services and sale of goods, Regarding the Banco Santander Process, on April 23, 2015, a STF decision was issued admitting the Extraordinary Appeal filed by the Federal Government regarding PIS and denying the follow-up to the Extraordinary Appeal of the Federal Public Prosecutor regarding Cofins, Both appealed this decision, without any success, so that the suit relating to Cofins is defined, ruling the judgment of the Federal Regional Court of the 4th Region of August 2007, favorable to Banco Santander, Pursuant to the STF, Banco Santander's PIS and the PIS and Cofins of other subsidiaries are pending final judgment,

Increase in CSLL Tax Rate - R$114,126 in the Consolidated (12/31/2019 - R$112,548 in the Consolidated): the Bank Santander and its subsidiaries are discussing the increase in the CSLL tax rate, from 9% to 15%, established by Executive Act 413/2008, subsequently converted into Law 11,727/2008, as from April 2008, In 2018, given the classification of success and unfavorable scenario in the Courts, we opted to pay the amounts discussed, except for Companhia de Crédito, Financiamento e Investimento Renault do Brasil (RCI), because the judicial proceedings are pending of judgment,

Main lawsuits and administrative proceedings with probable loss risk

Banco Santander and its subsidiaries are parties in lawsuits and administrative proceedings related to tax and social security matters, which their risk of loss are classified as probable, based on the opinion of legal counsel,

Provisional Contribution on Financial Transactions (CPMF) in Customer Operations - R$923,958 (12/31/2019 - R$906,355) at the Bank and Consolidated: in May 2003, the Brazilian Federal Revenue Service issued an infraction notice at Santander Distribuidora de Titulos e Valores Mobiliários Ltda, (Santander DTVM) and another auto at Banco Santander (Brasil) SA The object 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 occurred during the years 2000, 2001 and 2002, In June 2015, defenses were assessed with unfavorable decisions at the administrative level (CARF), 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, This lawsuit was ruled groundless and is currently awaiting judgment by the Regional Federal Court (TRF 3), Based on the legal advisors' assessment, a provision was set up to cover the loss considered probable in the lawsuit,

National Social Security Institute (INSS) - R$37,272 in the Bank and R$$37,279 in the Consolidated (12/31/2019 - R$282,046 in the Bank and R$282,053 in the Consolidated): Banco Santander and the subsidiaries discuss the collection of administrative and judicial

 

 

claims social security and education salary contributions on various amounts that, according to the opinion of legal advisors, do not have a salary nature,

Services Tax (ISS) - Financial Institutions - R$210,849 in the Bank and R$240,209 in the Consolidated (12/31/2019 - R$208,561 in the Bank and R$224,631 in the Consolidated): Banco Santander and the subsidiaries discuss the requirement administratively and judicially, by several municipalities, the payment of ISS on various revenues arising from operations that are not usually classified as service provision, In addition, other actions involving ISS, classified as possible loss risk, are described in note 17,h,

f) Lawsuits and Administrative Proceedings of Labor                                                                                            

These are lawsuits filed by labor Unions, Associations, Public Prosecutors and former employees claiming labor rights they believe are due, especially payment for overtime and other labor rights, including retirement benefit lawsuits,

For claims considered to be similar and usual, provisions are recognized based on the payments and successes historic, Claims that do not fit the previous criteria have their provisions constituted according to individual assessment performed, and provisions being constituted based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,

Former Banespa employees, Action distributed in 1998 by the Banespa Retired Association (AFABESP) requiring the payment of a semiannual bonus provided for in the Banespa regulations, 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, management or, alternatively, PLR, to retired employees of the extinct Banco do Estado de São Paulo SA - Banespa, hired until May 22, 1975, The bonus was not paid in 1994 and 1995 because the bank did not make a profit during these years, Partial payments were made between 1996 and 2000 as approved by the board of directors, The aforementioned clause was excluded from the regulation in 2001, The lawsuit was upheld by the Superior Labor Court, The Bank filed the appropriate funds with the STF, which, due to a monocratic decision, dismissed the appeal, A rescissory action was brought to dismiss the decision of the main action and suspend execution, There is a preliminary injunction in force that authorizes the execution of necessary enforcement acts to proceed with the execution until the attachment, however, any acts of seizure of assets or blocking of cash are prohibited until the judgment of the rescission action,

As of September 30, 2020, the case is classified as a probable loss and the provision was recorded based on the estimated loss,

g) Lawsuits and Administrative Proceedings of Civil                                                                                   

These contingencies are generally caused by: (1) Lawsuits with a request for revision of contractual terms and conditions or requests for monetary adjustments, including supposed effects of the implementation of various government economic plans, (2) lawsuits deriving of financing agreements, (3) lawsuits of execution; and (4) lawsuits of indemnity by loss and damage, For civil lawsuits considered common and similar in nature, provisions are recorded based on the average of cases closed, Claims that do not fit the previous criteria are provisioned according to individual assessment performed, and provisions are based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,

The main processes with the classification of risk of loss as probable are described below:

Lawsuits for Indemnity - seeking indemnity for material and emotional damage, regarding the consumer relationship on matters related to credit cards, consumer credit, bank accounts, collection and loans and other operations, In the civil lawsuits considered to be similar and usual, provisions are recorded based on the average of cases closed, Civil lawsuits that do not fit into the previous criteria are provisioned according to the individual assessment made, being the provisions recognized based on the risk of loss as probable, the law and jurisprudence according to the assessment of loss made by legal counsel,

Economic Plans - they referred to lawsuits filed by savings accountholders, related to supposed inflation purge arising from the Economic Plans (Bresser, Verão, Collor I and II), based on the understanding that such plans violated acquired rights relating to the application of inflation indexes on Saving Accounts, Lawsuits Deposits and Time Deposits (CDB), Provisions arising from such lawsuits are recorded based on the individual evaluation of loss made by external legal consultants,

The Banco Santander is also party in public class lawsuits on the same matter filed by consumer rights organizations, Public Prosecutor’s Offices and Public Defender’s Offices, The provision is made for the lawsuits with the classification of risk as probable, based on the individual execution orders, The STF is still analyzing the subject and has already ordered the suspension of all the procedures except those that were not already decided in courts or in phase of definitive execution, There are decisions favorable to banks at the STF with regard to the economic phenomenon similar to the savings accounts, as in the case of monetary restatement of time deposits - CDB and agreements (present value table),

However, the Supreme Court´s jurisprudence has not come to a conclusion regarding the constitutionality of the norms that changed Brazil’s monetary standard, On April 14, 2010, the STJ was recently decided that the deadline for the filing of civil lawsuits that argue the government's purge is five years, but this decision has not been handed down on the lawsuits yet, Thus, with this decision, a majority lawsuits, as they were filed after the period of five years is likely to be rejected, reducing the values involved, Still, the STF decided that the deadline for individual savers to become party on the public civil litigations, is also five years, counted from the final

 

 

unappealable sentence, Banco Santander believes in the success of the arguments defended in these courts based on their content and the legal basis,

At the end of 2017, the General Union Law (AGU), Bacen, Institute of Consumer Protection (Idec), the Brazilian Front of the Money savers (Febrapo), the Brazilian Banks Federation (Febraban) have signed an agreement with the purpose to close all lawsuits related to Economic Plans,  

The discussions focused on the definition of the amount that would be paid to each person according to the outstanding balance in the saving account, The total amount of the payments will depend on the number of the additional clients, and also on the number of money savers that approved in the courts the existance of their account and balance in the birthday date of the indexes changes, The term of agreement negotiated between the parties was submitted to the STF which approved the terms of the agreement,

The Management considers that the accrued provisions are due to charge interest in accordance with the plans, including considering the agreement approved by the STF,

h) Civil, Labor, Tax, and Security Social Liabilities Contingent Classified with Loss Risk as Possible

Refer to lawsuits and administrative proceedings involving tax, labor and civil matters classified by legal counsels with loss risk as possible, which they were not recorded,

The tax lawsuits classification with loss risk as possible totaled R$26,446 million in Consolidated, being the main lawsuits as follow:

INSS on Profits or Results (PLR) - Bank and the subsidiaries have several lawsuits and administrative proceedings arising from questioning tax authorities in connection with the taxation for social security purposes of certain items which are not considered to be employee remuneration, As of September 30, 2020, the amounts related to these proceedings totaled approximately R$4,366 million,

Tax on Services (ISS) - Financial Institutions - Banco Santander and its subsidiaries discuss administrative and legal requirements, by several municipalities, of the payment of ISS on various revenues arising from operations that are usually not classified as services, On September 30, 2020, the amounts related to these proceedings totaled approximately R$3,479 million,

Unapproved Compensation - The Bank and its affiliates discuss administrative and legal proceedings with the Federal Revenue Office to grant tax relief with credits arising from overpayments, On September 30, 2020, the amounts related to these proceedings totaled approximately R$4,710 million,

Goodwill Amortization of Banco Real - the Federal Tax Office of Brazil issued infraction notices against the Bank to require the income tax and social payments, including late charges, for the period of 2009, The Tax Authorities considered that the goodwill related to acquisition of Banco Real, amortized for accounting purposes prior to the merger, could not be deduced by Banco Santander for tax purposes, The infraction notice was contested, On July 14, 2015, the Police Judging RFB decided favorably to Banco Santander, fully canceling the tax debt, On November 10, 2016, the appeal was filed, prompting the Bank to lodge an appeal with CARF, which is awaiting judgment, On September 30, 2020, the balance was approximately R$1,436 million,

Credit Losses - Bank and its subsidiaries challenged the tax assessments issued by the Federal Revenue Services claiming the deduction for credit losses because they fail to meet the relevant requirements under applicable law, As of September 30, 2020, the amount related to this claim is approximately R$613 million,

Use of CSLL Tax and Negative Tax Loss - Tax assessments issued by the Federal Revenue Service in 2009 for alleged undue compensation of tax loss carryforwards and negative basis of CSLL, as a consequence of tax assessments drawn up in previous periods, Judgment is pending at the administrative level, As of September 30, 2020, the amount was R$1,069 million,

Goodwill Amortization of Banco Sudameris - the Tax Authorities have issued infraction notices to require the income tax and social contribution payments, including late charges, relating to tax deduction of amortization of goodwill from the acquisition of Banco Sudameris, related to the period of 2007 to 2012,  Banco Santander timely presented its appeals, which are pending with CARF, On September 30, 2020, the amounts related to these proceedings totaled approximately R$644 million,

IRPJ and CSLL - - Capital Gain - the Federal Tax Office of Brazil issued infraction notices against Santander Seguros, successor company of ABN AMRO Brasil  Dois Participações S,A, (AAB Dois Par), charging income Tax and Social Contribution to related base year 2005, The Federal Tax Office of Brazil claims that capital gain in sales of shares from Real Seguros S,A and Real Vida Previdência  S,A, by AAB Dois Par should be taxed by the rate of 34% instead 15%, The assessment was contested administratively based on understanding that tax treatment adopted at the transaction was in compliance with tax laws and capital gain was taxed properly, The administrative ended unfavorably, On July, 2020, the company filed a lawsuit seeking to cancel tax debts, This lawsuit is currently awaiting judgment,, The Banco Santander is responsible for any adverse outcome in this lawsuit as former Zurich Santander Brasil Seguros e Previdência S,A, stockholder,  As of September 30, 2020, the amount related to this lawsuit is approximately R$487 million,

The labor claims with classification of loss risk as possible totaled R$210 million in Consolidated, excluding the lawsuits below:

 

 

Readjustment of Banesprev retirement complements by the IGPDI - lawsuit filed in 2002 in Federal Court by the Association of Retired Employees of the Banco do Estado de São Paulo S,A, - Banespa, requesting the readjustment of the retirement supplementation by the IGPDI for Banespa retirees who have been admitted until May 22, 1975, The judgment granted the correction but only in the periods in which no other form of adjustment could be applied, The Bank and Banesprev have appealed this decision and although the appeals have not yet been judged, the Bank's success rate in this matter in the High Courts is around 90%, In Provisional Execution, calculations were presented by the Bank and Banesprev with "zero" result due to the exclusion of participants who, among other reasons, are listed as authors in other lawsuits or have already had some type of adjustment, The amount related to this claim is not disclosed due to the current stage of the lawsuit and such disclosure may impact the progress of the claim,

The liabilities related to civil lawsuits with classification of loss risk as possible totaled R$1,665 million in Consolidated, being the main lawsuits as follow:

Indemnity Lawsuit Related to Custody Services - provided by Banco Santander at an early stage which was not handed down yet,

Lawsuit Arising from a Contractual Dispute - the acquisition of Banco Geral do Comércio S,A, on appeal to the Court of the State of São Paulo (TJSP - Tribunal de Justiça do Estado de São Paulo),

i) Other Lawsuits Under the Responsibility of Former Controlling Stockholders

Refer to tax, labor and civil lawsuits, in the amounts of R$102,977, R$213 and R$639 (12/31/2019 - R$102,481, R$213 and R$578 in the Bank and in the Consolidated) in the Bank and in the Consolidated , respectively, recorded in other obligations - miscellaneous (Note 16) under the responsibility of the former controlling shareholders of banks and acquired companies, Based on the contracts signed, these actions are guaranteed full reimbursement by the former controlling shareholders, whose respective rights were accounted for in other credits - miscellaneous (Note 10),

18.   Stockholders’ Equity

a) Capital                                                                                                                                                                  

According to the by-laws, Banco Santander's capital stock may be increased up to the limit of its authorized capital, regardless of statutory reform, by resolution of the Board of Directors and through the issuance of up to 9,090,909,090 (nine  billion, ninety million, nine hundred and nine thousand and ninety) shares, subject to the established legal limits on the number of preferred shares, Any capital increase that exceeds this limit will require stockholders' approval,

The capital stock, fully subscribed and paid, is divided into registered book-entry shares with no par value,

Thousands of Shares

09/30/2020

12/31/2019

Common

Preferred

Total

Common

Preferred

Total

Brazilian Residents

117,247 

142,822 

260,069 

90,069 

115,785 

205,854 

Foreign Residents

3,701,448 

3,537,014 

7,238,462 

3,728,626 

3,564,051 

7,292,677 

Total

3,818,695 

3,679,836 

7,498,531 

3,818,695 

3,679,836 

7,498,531 

(-) Treasury Shares

(18,838) 

(18,838) 

(37,676) 

(16,702) 

(16,702) 

(33,404) 

Total Outstanding

3,799,857 

3,660,998 

7,460,855 

3,801,993 

3,663,134 

7,465,127 

 

b) Dividends and Interest on Capital                                                                                                                 

According to the Bank’s bylaws, stockholders are entitled to a minimum dividend equivalent to 25% of net income for the year, adjusted according to legislation, Preferred shares are nonvoting and nonconvertible, but have the same rights and advantages granted to common shares, in addition to priority in the payment of dividends at a rate that is 10% higher than those paid on common shares, and in the capital reimbursement, without premium, in the event of liquidation of the Bank,

Dividend payments have been calculated and paid in accordance with Brazilian Corporate Law,     

Prior to the Annual Stockholders Meeting, the Board of Directors may resolve on the declaration and payment of dividends on earnings based on: (i) balance sheets or earning reserves showed in the last balance sheet; or (ii) balance sheets issued in the period shorter than 6 months, since the total of dividends paid in each half of the fiscal year shall not exceed the amount of capital reserves, These dividends are fully attributed to the mandatory dividend,

Resolution No, 4820, of May 29, 2020, prohibits the institutions authorized to operate by the Central Bank of Brazil from paying interest on own capital and dividends above the mandatory minimum established in the bylaws, including in advance, until December 31 December 2020, The rule also prohibits the reduction of capital stock, except in specific situations and the increase in the remuneration of its officers, administrators and members of the Board of Directors and the Fiscal Council,

The following distribution of dividends and interest on capital made on September 30, 2020 and December 31, 2019,

 

 

 

09/30/2020

In Thousands

Brazilian Real per Thousand Shares/Units

of Brazilian Real

Gross

Net

Common

Preferred

Unit

Common

Preferred

Unit

Interest on Capital (1)(3)

890,000 

113,7129 

125,0842 

238,7972 

96,6560 

106,3216 

202,9776 

Interest on Capital (2)(3)

770,000 

98,3793 

108,2172 

206,5965 

83,6224 

91,9846 

175,6070 

Total

1,660,000 

(1) Deliberated by the Board of Directors on April 27, 2020, paid on June 24, 2020, without any monetary restatement,

(2) Deliberated by the Board of Directors on July 28, 2020, paid on September 25, 2020, without any monetary restatement,

(3) They were fully imputed to the minimum mandatory dividends to be distributed by the Bank for the fiscal year 2020,

 

 

12/31/2019

In Thousands

Brazilian Real per Thousand Shares/Units

of Brazilian Real

Gross

Net

Interest on Capital (1) (6)

1,000,000 

127,5853 

140,3438 

267,9291 

108,4475 

119,2922 

227,7397 

Interest on Capital (2) (6)

1,000,000 

127,6399 

140,4039 

268,0438 

108,4939 

119,3433 

227,8373 

Interest on Capital (3) (6)

1,000,000 

127,6610 

140,4271 

268,0881 

108,5119 

119,3631 

227,8750 

Interest on Capital (4) (6)

1,010,000 

128,9673 

141,8641 

270,8314 

109,6222 

120,5844 

230,2066 

Interim Dividends (5) (6)

6,790,000 

867,0180 

953,7197 

1,820,7377 

Total

10,800,000 

(1) Deliberated by the Board of Directors on March 29, 2019, paid on May 28, 2019, without any monetary restatement,

(2) Deliberated by the Board of Directors on June 28, 2019, paid on July 31, 2019, without any monetary restatement,

(3) Deliberated by the Board of Directors on September 30, 2019, paid on October 30, 2019, without any monetary restatement,

(4) Deliberated by the Board of Directors on December 27, 2019, paid on February 21, 2020, without any monetary restatement,

(5) Deliberated by the Board of Directors on December 27, 2019, paid on February 21, 2020, without any monetary restatement,

(6) The amount of interest on own capital and interim dividends was fully imputed to the minimum mandatory dividends distributed by the Bank for the year 2019,

 

c) Reserves                                                                                                                                                              

Net income, after deductions and statutory provisions, will be allocated as follows:                           

Legal Reserve                                                                                                                                                                 

According to Brazilian corporate law, 5% to the legal reserve, until it reaches 20% of the share capital, This reserve is intended to ensure the integrity of capital and can only be used to offset losses or increase capital, 

Capital Reserve                                                                                                                                               

The Bank´s capital reserve consists of: goodwill reserve for subscription of shares and other capital reserves, and can only be used to absorb losses that exceed retained earnings and profit reserves; redemption, reimbursement or acquisition of shares for the Bank´s own issue; capital increase; or payment of dividends to preferred shares under certain circumstances,

Reserve for Equalization Dividend                                              

After the allocation of dividends, the remaining balance if any, may, upon proposal of the Executive Board and approved by the Board of Directors, be allocated to reserve for equalization of dividends, which will be limited to 50% of the share capital, This reserve aims to ensure funds for the payment of dividends, including as interest on own capital, or any interim payment to maintain the flow of stockholders remuneration,              

d) Treasury Shares                                                                                                                                                 

In the meeting held on November 1, 2019, the Bank’s Board of Directors approved, in continuation of the buyback program that expired on November 5, 2019, the buyback program of its Units and ADRs, by the Bank or its agency in Cayman, to be held in treasury or subsequently sold,                                                            

The Buyback Program will cover the acquisition up to 37,256,072 Units, representing 37,256,072 common shares and 37,256,072 preferred shares, which, on December 31, 2019, corresponded to approximately 1% of the Bank’s share capital, On December 31, 2019, the Bank held 15,843,587 common shares and 15,843,587 preferred shares being traded,                                

The Buyback has the purpose to (1) maximize the value creation to stockholders by means of an efficient capital structure management; and (2) enable the payment of officers, management level employees and others Bank’s employees and companies under its control, according to the Long Term Incentive Plans, The term of the Buyback Program is 12 months counted from November 5, 2019, and will expire on November 4, 2020,

Bank/Consolidated

Shares in Thousands

 

 

 

09/30/2020

12/31/2019

Quantity

Quantity

Units

Units

Treasury Shares at Beginning of the Period

16,702 

13,317 

Shares Acquisitions

5,052 

6,465 

Payment - Share-Based Compensation

(2,916) 

(3,080) 

Treasury Shares at Beginning of the Period

18,838 

16,702 

Subtotal - Treasury Shares in Thousands of Reais

$789,832,34 

$679,364 

Issuance Cost in Thousands of Reais

$1,771,30 

$1,771 

Balance of Treasury Shares in Thousands of Reais

791,603,65 

$681,135 

Cost/Share Price

Units

Units

Minimum Cost

$7,55 

$7,55 

Weighted Average Cost

$33,24 

$32,10 

Maximum Cost

$49,55 

$49,55 

Share Price

$29,89 

$42,60 

(*) Considering since the beginning of operations on the stock exchange,

e) Minority Interest

Stockholders’ Equity

Non Controlling Interest

09/30/2020

12/31/2019

07/01 a
09/30/2020

01/01 a
09/30/2020

07/01 a
09/30/2019

01/01 a 09/30/2019

Banco RCI Brasil S,A, (Note 2,b)

849,394 

790,340 

23,462 

83,540 

(34,134) 

(90,309) 

Banco Hyundai Capital Brasil S,A,

158,835 

148,589 

2,017 

10,246 

1,715 

2,888 

Banco PSA (Note 2,b)

139,099 

131,222 

2,666 

7,878 

(2,966) 

(10,683) 

Rojo Entretenimento S,A,

7,149 

7,245 

(61) 

(96) 

(57) 

(121) 

Santander Leasing (Note 2,b)

447 

(0) 

(444) 

(4) 

(4) 

Olé Consignado (Note 2,b)

617,518 

(50,097) 

(150,401) 

FI RN Brasil - Financiamento de Veículos (1)

(1,299) 

(8,250) 

Getnet S,A, (Note 2,c)

(3,962) 

Santander FI SBAC

(1,374) 

(3,359) 

FI Direitos Creditórios RCI Brasil I (1)

(4,117) 

Return Capital Serviços de Recuperação de Créditos S,A, (Note 2,c)

(1,196) 

(2,257) 

Total

1,154,477 

1,695,361 

28,084 

101,124 

(89,412)

(270,575)

(1) Investment funds closed during 2019,

19.   Related Parties

a) Key Management Personnel Compensation

The Bank's Board of Directors' Meeting held on March 26, 2020 approved, in accordance with the favorable recommendation of the Compensation Committee, the proposal for the maximum global compensation for the Directors (Board of Directors and Executive Board) for the year 2020, in the amount up to R$400,000, covering fixed, variable and share-based compensation and other benefits, The proposal was the subject of a resolution at the Annual General Meeting (AGM) to be held on April 30, 2020,

a,1) Long Term Benefits

The Bank, as well as Banco Santander Espanha, as well as other subsidiaries of the Santander Group in the world, has long-term remuneration programs linked to the performance of the market price of its shares, based on the achievement of goals (Note 26),

a,2) Short Term Benefits

The following table shows the salaries and fees of the Board of Directors and Executive Board and refers to the amount recognized as an expense in the period ended September 30, 2020 and 2019, by Banco Santander and its subsidiaries to their Directors for the positions they hold Banco Santander and other companies of the Santander Conglomerate,

The amounts related to the Variable and Share-Based Compensation will be paid in the subsequent periods,

 

07/01 to
09/30/2020

01/01 to
09/30/2020

07/01 to
09/30/2019

01/01 to
09/30/2019

Fixed Compensation

21,715 

67,348 

17,472 

68,923 

Variable Compensation - in cash

11,621 

71,808 

24,371 

61,450 

Variable Compensation - in shares

19,379 

67,953 

9,855 

66,996 

Others

12,202 

35,362 

14,724 

33,178 

Total Short-Term Benefits

64,917 

242,471 

66,421 

230,547 

Variable Compensation - in cash

8,950 

86,933 

18,025 

79,274 

Variable Compensation - in shares

28,277 

84,422 

8,137 

77,169 

 

 

 

Total Long-Term Benefits

37,227 

171,355 

26,162 

156,443 

Total

102,144 

413,826 

92,583 

386,990 

 

Additionally, in the third quarter of 2020, charges on Management's remuneration were paid in the amount of R$21,525 (2019 - R$35,128),

b) Contract Termination                                                                                                                                       

The termination of the employment relationship of managers for non-fulfillment of obligations or voluntarily by the employee does not give right to any financial compensation and its benefits will be discontinued,

c) Lending Operations                                                                                                                                                           

The Bank and its subsidiaries may carry out transactions with related parties, in line with the legislation in force as set forth in articles 6 and 7 of CMN Resolution nº 4,693/18, article 34 of Law 6,404/76 "Law of Corporations" and the Policy for Transactions with Related Parties of Santander published on the Investor Relations website, being considered related parties:

(1)            its controllers, natural or legal persons, under the terms of art, 116 of the Law of Corporations;

(2)            its directors and members of statutory or contractual bodies;

(3)            in relation to the persons mentioned in items (i) and (ii), their spouse, companion and relatives, consanguineous or the like, up to the second degree;

(4)            natural persons with qualified equity interest in their capital;

(5)            corporate entities with qualified equity interest in their capital;

(6)            legal entities in whose capital, directly or indirectly, a Santander Financial Institution has a qualified shareholding;

(7)            legal entities in which a Santander Financial Institution has effective operational control or preponderance in the deliberations, regardless of the equity 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

09/30/2020

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)

1,107,673 

29,0% 

1,019,645 

27,7% 

2,127,318 

28,4% 

Banco Santander, S,A, (1)

521,964 

13,7% 

519,268 

14,1% 

1,041,232 

13,9% 

Employees

2,579 

0,1% 

2,589 

0,1% 

5,168 

0,1% 

Directors (*)

4,968 

0,1% 

4,968 

0,1% 

9,936 

0,1% 

Others

353,090 

9,2% 

380,884 

10,4% 

733,974 

9,8% 

Total Outstanding

3,799,857 

99,5% 

3,660,998 

99,5% 

7,460,855 

99,5% 

Treasury Shares

18,838 

0,5% 

18,838 

0,5% 

37,676 

0,5% 

Total

3,818,695 

100,0% 

3,679,836 

100,0% 

7,498,531 

100,0% 

Free Float (2)

355,669 

9,3% 

383,473 

10,4% 

739,142 

9,9% 

 

 

 

 

 

 

 

Shares in Thousands

12/31/2019

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)

1,107,673 

29,0% 

1,019,645 

27,7% 

2,127,318 

28,4% 

Banco Santander, S,A, (1)

521,964 

13,7% 

519,268 

14,1% 

1,041,232 

13,9% 

Employees

2,526 

0,1% 

2,533 

0,1% 

5,059 

0,1% 

Directors (*)

4,525 

0,1% 

4,525 

0,1% 

9,050 

0,1% 

Others

355,722 

9,3% 

383,519 

10,4% 

739,241 

9,9% 

Total Outstanding

3,801,993 

99,6% 

3,663,134 

99,6% 

7,465,127 

99,6% 

Treasury Shares

16,702 

0,4% 

16,702 

0,6% 

33,404 

0,4% 

Total

3,818,695 

100,0% 

3,679,836 

100,0% 

7,498,531 

100,0% 

Free Float (2)

358,248 

9,4% 

386,053 

10,5% 

744,301 

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 included in the policy are carried out in view of the interests of Banco Santander and its shareholders, The policy defines powers to approve certain transactions by the Board of Directors, The envisaged rules are also applied to all employees and managers of Banco Santander and its subsidiaries,

The operations and remuneration of services with related parties are carried out in the normal course of business and under conditions of exchange, including interest rates, terms and guarantees, and do not involvee risks greater than the normal collection or have other disadvantages,

Bank

Consolidated

Assets

Income

Assets

Income

Assets

Income

Assets

Income

(Liabilities)

(Expenses)

(Liabilities)

(Expenses)

(Liabilities)

(Expenses)

(Liabilities)

(Expenses)

09/30/2020

07/01 to
09/30/2020

01/01 to
09/30/2020

12/31/2019

07/01 a 09/30/2019

01/01 a 09/30/2019

09/30/2020

07/01 to
09/30/2020

01/01 to
09/30/2020

12/31/2019

07/01 a 09/30/2019

01/01 a 09/30/2019

Cash

2,039,210 

840,686 

2,184,754 

1,106,373 

Banco Santander Espanha (2)

1,963,466 

770,425 

2,109,010 

1,089,578 

Others

75,744 

70,261 

75,744 

16,795 

Interbank Investments

75,528,506 

912,223 

2,493,734 

76,904,602 

1,583,501 

3,862,851 

190 

8,094 

4,111,489 

20,799 

83,305 

Aymoré CFI (3)

44,735,223 

615,836 

1,844,679 

42,683,530 

1,151,797 

2,671,353 

Banco Santander Espanha (1) (2)

191 

8,067 

4,111,489 

20,779 

83,183 

190 

8,094 

4,111,489 

20,799 

83,305 

Bandepe(3)

23,615,621 

120,632 

412,731 

10,051,166 

47,043 

91,036 

Olé Consignado (3)

12,412,492 

269,436 

777,272 

Others

7,177,662 

175,564 

228,257 

7,645,925 

94,446 

240,007 

Securities

311,002 

1,671 

8,189 

375,377 

2,013 

12,963 

Santander Leasing (3)

311,002 

1,671 

8,189 

375,377 

2,013 

12,963 

Derivatives Financial Instruments - Net

(5,167,156)

(461,687)

774,070 

(1,004,057)

(223,871)

(1,376)

(3,516,936)

115,302 

(1,708,155)

(1,172,059)

(193,417)

91,325 

Real Fundo de Investimento Multimercado Santillana Crédito Privado
  (Fundo de Investimento Santillana) (4)

(377,014) 

170,660 

(373,448) 

(113,931) 

714,263 

(377,014) 

170,660 

(373,448) 

(113,931) 

714,263 

Banco Santander Espanha (2)

(3,145,292) 

(57,555) 

(1,265,171) 

(1,026,552) 

(157,159) 

(557,180) 

(3,139,922) 

(55,502) 

(1,334,989) 

(1,058,128) 

(193,429) 

(622,994) 

Santander FI Hedge Strategies (3)
  (Nota 2)

(831,834) 

93,464 

1,466,751 

255,838 

1,022,432 

1,023,440 

Santander FI Diamantina (3)

(873,127) 

(580,800) 

884,716 

(201,763) 

(1,108,159) 

(1,339,085) 

Key Management Personnel

144 

282 

12 

55 

144 

282 

Others

60,111 

(87,600) 

60,940 

82,351 

19,003 

157,131 

12 

56 

Interfinancial Relations

13,799,051 

(1,620)

8,259 

9,206,678 

2,088 

3,939 

Getnet S,A, (Nota 12) (3) (7)

13,794,491 

292 

5,595 

9,198,824 

985 

1,879 

Santander Leasing (3)

4,560 

(1,912) 

2,664 

7,854 

1,103 

2,060 

Loan Operations

1,372,434 

270 

716 

616,157 

83 

344 

69,993 

277 

738 

11,284 

85 

349 

Getnet S,A,

1,302,618 

605,157 

Gestora de Inteligência de Crédito

38,038 

38,038 

Loop Gestão de Pátios S,A,

13,439 

13,439 

Key Management Personnel (9)

18,339 

270 

716 

11,000 

83 

344 

18,516 

277 

738 

11,284 

85 

349 

Dividends and Bonuses Receivables

162,052 

280,499 

14 

20,367 

Aymoré CFI(3)

37,949 

Banco RCI Brasil S,A,(3)

25,091 

Webmotors S,A(5)

14 

20,367 

 

 

 

Getnet S,A,(3)

67,518 

Sancap Investimentos e Participações S,A, (3)

64,594 

Olé Consignado

75,000 

Santander Brasil EFC (3)

155,661 

Santander Leasing(3)

2,105 

Santander Corretora de Seguros (3)

4,286 

Others

10,347 

Trading Account

689,663 

666 

4,782 

504,782 

251 

1,327 

689,663 

666 

90,030 

504,782 

9,797 

(2,744)

Banco Santander Espanha(2)

689,663 

666 

4,782 

504,782 

251 

1,327 

689,663 

666 

90,030 

504,782 

9,797 

(2,744) 

Foreign Exchange Portfolio - Net

253,553 

(105,557)

775,828 

294,581 

(158,695)

(162,896)

253,553 

(105,557)

775,828 

294,581 

(158,211)

(162,896)

Banco Santander Espanha(2)

253,553 

(105,622) 

775,703 

294,581 

(158,801) 

(163,002) 

253,553 

(105,622) 

775,703 

294,581 

(158,239) 

(163,002) 

Key Management Personnel

65 

125 

106 

106 

65 

125 

28 

106 

Income Receivable

875,840 

582,722 

1,542,352 

884,878 

522,712 

1,601,456 

878,534 

1,085,719 

2,199,978 

901,574 

407,379 

1,957,838 

Zurich Santander Brasil Seguros e Previdência S,A,(8)

806,129 

524,463 

1,374,213 

826,100 

464,598 

1,425,712 

808,823 

1,113,342 

2,076,659 

842,796 

387,685 

1,781,615 

Zurich Santander Brasil Seguros S,A,(8)

69,711 

58,259 

168,139 

58,778 

58,114 

175,744 

69,711 

(27,623) 

123,319 

58,778 

19,694 

176,223 

Receivables from Affiliates

51,723 

136,545 

453,301 

19,396 

155,687 

515,804 

5,572 

1,083 

6,130 

5,022 

2,825 

6,948 

Aymoré CFI (3)

84,217 

304,949 

118,099 

361,150 

Santander CCVM (3)

17,348 

50,394 

16,358 

42,863 

Santander Brasil Consórcio (3)

604 

5,739 

16,257 

5,080 

14,256 

Santander Corretora de Seguros(3)

8,400 

25,199 

8,400 

24,216 

Santander Brasil Gestão de Recursos Ltda

169 

1,057 

5,500 

169 

1,057 

5,500 

169 

2,082 

4,021 

Santander Brasil Gestão de Recursos Ltda

532 

Esfera Fidelidade S,A,

4,456 

770 

2,310 

10,064 

Banco Santander Espanha (2)

4,516 

4,516 

4,516 

4,516 

Santander FI Hedge Strategies(3) (Nota 2)

6,347 

1,035 

3,464 

2,883 

Getnet S,A, (3) (7)

316 

1,609 

4,612 

316 

1,774 

33,644 

Ben Benefícios e Serviços S,A,

146 

440 

196 

196 

Bandepe

93 

281 

Produban Sreviços de Informatica S,A, (4)

32,190 

244 

733 

Santander fundo de Investimento Diamantina Multimercado Crédito Privado Investimento no exterior (3)

1,671 

10,337 

25,118 

Others

1,454 

5,550 

14,044 

1,617 

5,780 

39,479 

355 

26 

630 

337 

743 

2,927 

Non Operating Income

168,588 

168,588 

Super Pagamentos e Administração de Meios Eletrônicos S,A,

168,588 

168,588 

Other Receivables - Others

2,485,181 

32,803 

187,577 

307,201 

101,148 

286,227 

2,519,079 

125,228 

163,187 

347,335 

18,095 

41,820 

Gesban Servicios Administrativos Globales, S,L,

8,006 

Banco Santander Espanha (2)

2,475,527 

273,232 

6,448 

6,448 

2,519,029 

(35) 

347,335 

6,415 

6,371 

Santander Capitalização S,A, (3)

6,105 

18,802 

148,786 

29,749 

85,173 

250,398 

Banco Santander International (4)

10,506 

34,227 

9,039 

26,515 

10,506 

34,227 

9,039 

26,515 

Santander Securities Services Brasil DTVM S,A,(4)

374 

1,124 

371 

1,112 

2,131 

6,394 

2,127 

6,382 

Key Management Personnel

25 

118 

70 

167 

43 

186 

92 

263 

Others

3,549 

3,096 

3,322 

4,220 

47 

1,587 

50 

112,548 

114,409 

422 

2,289 

Deposits

(24,972,500)

269,259 

679,534 

(12,220,825)

(605,588)

(530,963)

(1,021,988)

(682)

(17,285)

(1,073,134)

(14,061)

(98,734)

Santander Leasing

(289,186) 

(1,438) 

(2,522) 

(64,547) 

(1,100) 

(8,037) 

Banco Santander Espanha

(14,240) 

(12,294) 

(57,690) 

Aymoré CFI

(766,974) 

(4,293) 

(24,141) 

(672,355) 

(26,526) 

(168,512) 

 

 

 

Zurich Santander Brasil Seguros e Previdência S,A

(263,877) 

(199,934) 

(263,877) 

Zurich Santander Brasil Seguros S,A

(26,438) 

(26,438) 

(199,934) 

Santander Brasil Gestão de Recursos Ltda,(4)

(79) 

(583) 

(3,757) 

(332,916) 

(4,432) 

(12,061) 

(79) 

(583) 

(3,757) 

(332,916) 

(4,432) 

(12,061) 

Fundo de Investimento Santillana (4)

(10) 

3,314 

(20,571) 

(58,239) 

(10) 

3,314 

(20,571) 

(58,239) 

Santander Securities Services Brasil DTVM S,A,

(540,292) 

(2,864) 

(11,962) 

(404,427) 

(7,773) 

(22,450) 

(540,292) 

(2,864) 

(11,962) 

(7,773) 

(22,450) 

Santander Securities Services Brasil Participações S,A, (4)

(404,427) 

Santander Brasil Consórcio (3)

(1,057) 

(4) 

(16) 

(16) 

(49) 

Santander FI Hedge Strategies (3)
  (Nota 2)

(745,350) 

(405,299) 

(85,497) 

Santander FI Diamantina(3)

(22,348,749) 

282,270 

734,880 

(8,920,327) 

(141,032) 

(141,032) 

Super Pagamentos e Administração de Meios Eletrônicos S,A,

(7,468) 

(1) 

(596) 

(2,604) 

(7,468) 

(1) 

Key Management Personnel

(32,914) 

(148) 

(700) 

(36,068) 

(727) 

(1,710) 

(32,914) 

(148) 

(700) 

(36,104) 

(727) 

(1,710) 

Others

(681,216) 

(6,995) 

(12,247) 

(812,036) 

(18,087) 

(30,772) 

(93,220) 

(401) 

(865) 

(79,182) 

(1,129) 

(4,274) 

Repurchase Commitments

(8,967,655)

(83,136)

(170,503)

(5,691,457)

(77,943)

(234,487)

(2,431,698)

(11,551)

(34,375)

(3)

(12)

Santander FI Amazonas(3)

(378,821) 

(2,350) 

(5,560) 

(131,317) 

(4,644) 

(12,197) 

Super Pagamentos e Administração de Meios Eletrônicos S,A,

(192,353) 

(4,357) 

(6,163) 

(192,353) 

(4,357) 

(6,163) 

Apolo Fundo de Investimento em Direitos Creditórios

(76,428) 

(592) 

(592) 

(76,428) 

(592) 

(592) 

Santander Leasing(3)

(1,324,636) 

(9,540) 

(29,997) 

(1,253,584) 

(21,091) 

(63,626) 

Santander CCVM(3)

(184,283) 

(862) 

(2,936) 

(97,488) 

(1,575) 

(3,820) 

Santander FI SBAC(3)

(3,107,928) 

(51,443) 

(71,027) 

(2,713,050) 

(35,316) 

(112,835) 

Santander FI Guarujá(3)

(458,776) 

(2,173) 

(9,034) 

(372,545) 

(5,217) 

(15,481) 

Santander FI Diamantina(3)

(557,499) 

4,914 

(1,148) 

(255,043) 

(867) 

(2,161) 

Santander FI Unix(3)

(26,601) 

(130) 

(2,462) 

(366,357) 

(5,507) 

(15,522) 

Fundo de Investimento Santillana (4)

(2,162,914) 

(6,602) 

(27,613) 

(2,162,914) 

(6,602) 

(27,613) 

Others

(497,264) 

(10,001) 

(13,964) 

(502,073) 

(3,723) 

(8,833) 

(3) 

Key Management Personnel

(152) 

(7) 

(3) 

(12) 

(7) 

(3) 

(12) 

Funds from Acceptance and Issuance of Securities

(101,794)

(869)

(2,828)

(89,074)

(2,033)

(4,512)

(101,794)

(869)

(2,828)

(89,074)

(2,033)

(4,512)

Key Management Personnel

(101,794) 

(869) 

(2,828) 

(89,074) 

(2,033) 

(4,512) 

(101,794) 

(869) 

(2,828) 

(89,074) 

(2,033) 

(4,512) 

Loan and Onlendings

(13,235,044)

(1,629)

(3,012)

(2,581,530)

(8,475,700)

(1,629)

(3,012)

Banco Santander Río S,A,

Banco Santander México (4)

(11,504) 

(11,504) 

Banco Santander Espanha (2)

(8,464,196) 

(1,629) 

(3,012) 

(8,464,196) 

(1,629) 

(3,012) 

Santander Brasil EFC (3)

(4,759,344) 

(2,581,530) 

Dividends and Bonuses in Paying

1,042 

(9,098)

(6,886,828)

1,042 

(9,098)

(6,886,828)

Banco Santander Espanha (2)

(1,067,623) 

(1,067,623) 

Sterrebeeck B,V, (2)

(3,629,772) 

(3,629,772) 

GES (2) (4)

(2,177,207) 

(2,177,207) 

Banco Madesant(4)

(1,948) 

(1,948) 

Key Management Personnel (11)

1,042 

(9,098) 

(10,278) 

1,042 

(9,098) 

(10,278) 

Payables from Affiliates

(492,470)

(207,333)

(1,307,507)

(127,148)

(252,081)

(567,769)

(381,606)

(221,427)

(992,597)

(28,349)

(20,979)

(293,732)

Santander Brasil Tecnologia S,A, (3)

(4,353) 

51,473 

(165,113) 

(46) 

40,586 

(121,228) 

Banco Santander Espanha

(154,120) 

(57,049) 

(668,504) 

(176) 

(1,154) 

(154,141) 

(57,049) 

(668,504) 

(21) 

(178) 

(1,155) 

Santander Corretora de Seguros (3)

(11,675) 

(29,790) 

(121,559) 

(12,127) 

(38,624) 

(100,005) 

Getnet S,A, (3)

(14,626) 

(5,895) 

(17,175) 

(12,886) 

(7,035) 

(22,317) 

Santander Securities Services Brasil DTVM S,A,

(8,769) 

(12,271) 

(35,234) 

(12,516) 

(36,457) 

(8,769) 

(12,271) 

(35,234) 

(5,066) 

(12,516) 

(36,457) 

Santander Leasing(3)

(79,374) 

(79,387) 

(33,309) 

 

 

 

Santander Brasil Asset Management Distribuidora de Títulos e Valores
  Mobiliários S,A (Santander Brasil Asset) (4)

(7,203) 

(7,203) 

(170) 

(429) 

(14,406) 

190 

(722) 

Santander Global Technology, S,L,, SOCI

(211,095) 

(104,500) 

(224,003) 

(8,240) 

(225,465) 

(225,465) 

(211,095) 

(104,726) 

(224,618) 

(8,240) 

(226,488) 

Others

(1,255) 

(49,301) 

(75,919) 

(14,462) 

(8,851) 

(27,834) 

(398) 

(47,211) 

(63,812) 

(616) 

(8,475) 

(28,910) 

Subordinated Debts

(14,473,733)

(754,411)

(5,060,110)

(10,175,961)

(1,088,566)

(1,477,614)

(14,473,733)

(754,411)

(5,060,110)

(10,175,961)

(1,088,566)

(1,477,614)

Banco Santander Espanha (2) (6)

(14,473,733) 

(754,411) 

(5,060,110) 

(10,175,961) 

(1,088,566) 

(1,477,614) 

(14,473,733) 

(754,411) 

(5,060,110) 

(10,175,961) 

(1,088,566) 

(1,477,614) 

Donations

(4,100)

(12,400)

(4,430)

(13,560)

(2,078,575)

(2,087,500)

Santander Cultural

(1,036,725) 

(1,037,500) 

Fundação Sudameris

(4,100) 

(12,400) 

(4,100) 

(12,400) 

(1,041,850) 

(1,050,000) 

Fundação Santander

(330) 

(1,160) 

Other Payables - Others

(4,882,838)

(384,135)

(1,314,195)

(3,926,496)

(762,114)

(1,364,579)

(447,355)

(200,787)

(743,346)

(379,980)

(264,558)

(696,908)

Banco Santander Espanha(2)

(1,837) 

(4,007) 

(4,007) 

(2,865) 

(24) 

(1,967) 

(1,277) 

(4,007) 

TecBan (5)

(88,161) 

(274,477) 

(255,452) 

(255,452) 

(88,161) 

(274,477) 

(255,452) 

Santander Brasil Tecnologia S,A,(3)

(57,248) 

(168,228) 

(62,390) 

(190,803) 

Aquanima Brasil Ltda,(4)

(7,726) 

(22,334) 

(7,109) 

(20,934) 

(7,771) 

(22,468) 

(7,149) 

(20,986) 

Santander Securities Services Brasil DTVM S,A,

(508) 

(2,528) 

(831) 

(2,530) 

(508) 

(2,528) 

(831) 

(2,530) 

Zurich Santander Brasil Seguros e Previdência S,A,(8)

(19,954) 

(4,432) 

(16,633) 

(21,219) 

(6,304) 

(17,801) 

Getnet S,A, (3)

(4,468,127) 

(142,969) 

(461,325) 

(3,573,943) 

(193,537) 

(524,140) 

SANTANDER GLOBAL TECHNOLOGY, S,L,, SOCI

(2,858) 

(9,540) 

(2,858) 

(9,540) 

Key Management Personnel

(414,688) 

(91,494) 

(371,481) 

(352,553) 

(234,705) 

(360,272) 

(422,980) 

(102,144) 

(413,826) 

(357,249) 

(250,350) 

(395,082) 

Others

(23) 

6,829 

(2,445) 

(4,083) 

(6,441) 

(1,556) 

5,111 

(1,907) 

(235) 

76 

(1,050) 

Guarantees and Limits (10)

8,731 

15 

42 

5,010 

8,731 

15 

42 

5,010 

Key Management Personnel (9)

8,731 

15 

42 

5,010 

8,731 

15 

42 

5,010 

(1) Controller - Banco Santander is indirectly controlled by Banco Santander Espanha (Notes 1 and 26,d), through the subsidiaries GES and Sterrebeeck B,V,

(2) Direct or indirect subsidiary by Banco Santander,

(3) Direct or indirect subsidiary by Banco Santander Espanha,

(4) Jointly-controlled company - Banco Santander,

(5) Refers to the portion acquired by the Controller from the PR Optimization Plan carried out in the first half of 2014,

(6) Corresponds to receivables related to Acquiring,

(7) Significant influence of Banco Santander Espanha,

(8) As of 2019, the policy to carry out loans with key management personnel has changed and the balance of the contracted operations does not depend on the term of the mandates,

(9) Refers to the recording in the clearing accounts of Guarantees and Limits of credit operations with Key Management Personnel,


 

 

20.   Income from Services Rendered and Banking Fees

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Asset Management

142,750 

435,962 

193,320 

540,198 

261,984 

740,246 

291,237 

807,676 

Checking Account Services

1,020,037 

2,903,486 

976,012 

2,817,598 

1,021,553 

2,907,836 

995,091 

2,855,773 

Lending Operations and Income from Guarantees Provided

275,271 

787,311 

250,661 

735,815 

378,176 

1,048,531 

350,473 

1,016,038 

   Lending Operations

94,299 

311,167 

112,454 

322,943 

197,204 

572,387 

212,266 

603,166 

   Income Guarantees Provided

180,972 

476,144 

138,207 

412,872 

180,972 

476,144 

138,207 

412,872 

Insurance Fees

471,867 

1,546,511 

593,628 

1,798,574 

745,333 

2,209,539 

771,170 

2,285,355 

Cards (Debit and Credit) and Acquiring Services

954,141 

2,696,950 

1,001,687 

3,081,695 

1,406,512 

3,968,519 

1,462,043 

4,548,407 

Collection

375,573 

1,091,346 

380,111 

1,130,989 

368,629 

1,086,272 

381,201 

1,133,797 

Brokerage, Custody and Placement of Securities

293,575 

628,794 

239,312 

622,461 

361,015 

838,477 

317,195 

774,166 

Others

83,265 

183,412 

69,054 

187,650 

203,142 

531,269 

181,895 

460,311 

Total

3,616,479 

10,273,772 

3,703,785 

10,914,980 

4,746,344 

13,330,689 

4,750,305 

13,881,523 

 

21.   Personnel Expenses

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Compensation

931,392 

2,758,105 

973,587 

2,886,565 

1,045,482 

3,112,134 

1,094,511 

3,254,268 

Charges

334,987 

993,298 

338,104 

1,016,275 

386,393 

1,161,786 

400,936 

1,194,126 

Benefits

301,594 

932,903 

351,326 

1,015,876 

344,688 

1,069,051 

400,409 

1,151,252 

Training

6,128 

29,316 

13,363 

38,937 

7,893 

33,335 

16,353 

44,437 

Others

841 

3,669 

2,155 

6,626 

13,938 

43,714 

2,498 

8,067 

Total

1,574,942 

4,717,291 

1,678,535 

4,964,279 

1,798,394 

5,420,020 

1,914,707 

5,652,150 

 

22.   Other Administrative Expenses

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Depreciation and Amortization

679,635 

1,937,155 

560,404 

1,639,284 

773,634 

2,285,648 

702,611 

2,053,665 

Outsourced and Specialized Services

484,077 

1,367,295 

467,875 

1,388,194 

613,164 

1,785,083 

591,770 

1,753,297 

Communications

94,596 

277,680 

95,768 

290,759 

98,516 

293,226 

101,998 

309,098 

Data Processing

770,293 

2,089,172 

590,199 

1,770,779 

739,835 

2,061,273 

606,516 

1,801,173 

Advertising, Promotions and Publicity

112,561 

323,764 

115,140 

320,537 

141,949 

417,621 

147,702 

447,087 

Rentals

197,506 

592,771 

191,397 

570,648 

199,936 

604,073 

198,179 

591,674 

Transportation and Travel

16,303 

62,279 

37,397 

109,720 

19,755 

78,308 

47,871 

139,733 

Financial System Services

61,443 

190,877 

53,548 

167,588 

75,542 

244,055 

72,831 

217,637 

Security and Money Transport

141,933 

433,675 

143,459 

453,031 

142,223 

434,497 

144,343 

455,453 

Asset Maintenance and Upkeep

75,364 

206,704 

63,928 

174,819 

82,632 

229,756 

66,277 

185,178 

Water, Electricity and Gas

39,997 

139,265 

46,425 

155,572 

40,634 

142,006 

47,584 

159,507 

Materials

4,258 

44,461 

12,053 

32,721 

8,829 

53,946 

14,998 

37,581 

 

 

 

Others

194,722 

487,443 

156,859 

403,322 

273,354 

713,993 

227,065 

636,713 

Total

2,872,688 

8,152,541 

2,534,452 

7,476,974 

3,210,003 

9,343,485 

2,969,745 

8,787,796 

 

23.   Other Operating Income

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Net Income Pension and Capitalization

156,350 

404,024 

128,922 

388,975 

Reversal of Operating Provisions - Fiscal (Note 17,c)

187,282 

199,760 

183,709 

203,992 

Provision for Financial Guarantees (Note 16,a)

7,327 

7,327 

10,812 

36,294 

7,327 

7,327 

10,812 

36,294 

Monetary Adjustment of Escrow Deposits

9,562 

203,662 

99,874 

387,814 

12,592 

235,032 

119,091 

449,123 

Recoverable Taxes

8,371 

112,621 

16,220 

50,745 

12,009 

133,143 

24,040 

76,725 

Recovery of Charges and Expenses

208,814 

809,875 

192,386 

581,675 

184,229 

658,510 

138,573 

398,860 

Monetary Variation

24,287 

50,598 

24,851 

51,663 

Others (2)

712,893 

2,134,235 

1,022,930 

1,484,365 

959,637 

3,052,795 

1,252,393 

1,923,039 

Total

1,134,249 

3,467,480 

1,366,509 

2,591,491 

1,515,853 

4,694,826 

1,698,682 

3,324,679 

 

24.   Other Operating Expenses

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Operating Provisions

   Fiscal (Note 17,c)

240,519 

256,397 

245,773 

246,706 

   Labor (Note 17,c)

205,056 

719,009 

343,483 

607,735 

221,375 

756,160 

359,594 

666,871 

   Civil (Note 17,c)

250,010 

442,471 

338,548 

430,904 

296,851 

570,942 

433,782 

594,565 

Credit Cards

817,273 

2,570,997 

1,091,252 

3,237,147 

771,789 

2,193,717 

853,592 

2,304,505 

Actuarial Losses - Pension Plan

55,962 

194,347 

93,457 

203,336 

55,946 

195,414 

94,504 

203,601 

Legal Fees and Costs

29,856 

71,756 

30,995 

111,038 

30,425 

75,308 

18,114 

114,428 

Serasa and SPC (Credit Reporting Agency)

18,256 

43,341 

16,726 

49,844 

18,660 

44,914 

17,248 

51,231 

Brokerage Fees

20,922 

61,772 

21,339 

69,851 

20,045 

60,942 

21,607 

70,209 

Commissions

267,326 

568,958 

241,056 

483,732 

553,969 

1,482,937 

569,970 

1,423,139 

Others (1)

421,020 

2,867,006 

457,516 

1,666,630 

900,128 

4,332,401 

1,009,105 

3,209,743 

Total

2,085,681 

7,539,657 

2,874,891 

7,116,614 

2,869,188 

9,712,735 

3,623,289 

8,884,998 

(1) In the period ended September 30, 2020 and 2019, it mainly includes monetary restatement on provisions for lawsuits and administrative and legal obligations, provisions for the benefit guarantee fund and other provisions,

 


 

 

25.   Non-Operating Income

Bank

Consolidated

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

 07/01 to 09/30/2020

 01/01 to 09/30/2020

 07/01 to 09/30/2019

 01/01 to 09/30/2019

Result on sale of Investments

168,588 

168,588 

1,899 

6,268 

Result on Sale of Other Assets

15,273 

45,880 

(5,300) 

1,273 

14,256 

35,406 

(15,430) 

(14,319) 

Reversal (Recognition) of Allowance for Losses on Other Assets (1)

2,367 

13,027 

13,131 

11,417 

3,334 

23,742 

27,707 

(92,223) 

Expense on Assets Not in Use

(13,914) 

(38,020) 

(12,394) 

(40,856) 

(13,997) 

(38,196) 

(13,072) 

(41,797) 

Gains (Losses) of Capital

6,776 

6,037 

(638) 

333 

6,760 

3,783 

(650) 

(115) 

Other Income (Expenses)

11,595 

57,415 

13,669 

50,897 

5,519 

59,132 

18,396 

49,654 

Total

22,098 

252,928 

8,468 

23,064 

15,872 

252,455 

18,850 

(92,532)

 

26.   Employee Benefit Plans - Post-Employment Benefits

a) Share-based compensation

Banco Santander has long-term compensation programs linked to the performance of the market price of its shares, The members of Banco Santander 's Executive Board are eligible for these plans, in addition to the participants that were determined by the Board of Directors, whose choice will take into account seniority in the group, The members of the Board of Directors only participate in these plans when they hold positions in the Executive Board,

a,1) Local and Global Programs

Below are the long-term compensation programs and their characteristics,

Program

 

Plan

 

Liquidity Type

Vesting Period

 

Period of Exercise/Settlement

Local

 

Long-Term Incentive Plan - Private Ultra High (1)

Money

 

Dec/2017 to Dec/19

 

In March/2020 and March/2021

Global

 

Global Long-Term – ILP CRDIV - Granted 2015 (2) (3)

Santander Global Group Shares

2015 to 2018

 

In March/2019 and March/2020

Local

 

Long-Term Incentive Plan – Technology

Santander Brasil Bank Shares

Jul/2019 to Jun/2022

 

In July/2022

Local

 

Long-Term Incentive Plan – Pi Investments

Santander Brasil Bank Shares

Jan/2019 to Dec/2021

In March/2022 and March/2023

Local

 

Long-Term Incentive Plan – Ben'

 

Santander Brasil Bank Shares

Jan/2019 to Dec/2021

In March/2022 and March/2023

Local

 

Long-Term Incentive Plan – Sim

 

Ações Banco Santander Brasil

Jan/2020 a Dec/2022

 

In March/2023 and March/2024

Local

 

Long-Term Incentive Plan – High Performance

Ações Banco Santander Brasil

Sep/2020 a Aug/2023

In September/2023

Global

 

Long-Term Incentive Plan – DTA

 

 

 

2019 a 2022

 

From March/2023 to March/2030

(1) It aims at the growth and profitability of the Private business and the recognition of the Participant's contribution,

(2) Subject to the achievement of the Santander Group's RTA performance indicator, comparing the Group's evolution in this indicator with that of the main global competitors,

(3) The Plan does not cause dilution of the Bank's share capital, since it is paid in shares of Santander Spain, The type of settlement of the global program, grant 2015, was changed in March 2019, from Santander Global group shares, to cash,

 

a,1,a) Fair Value and Performance Parameters for Current Plans

i, Private Ultra High

Each participant had a reference value defined in Reais, if the indicators were reached, the percentage of achievement would be applied over the reference value, with the payment of the first installment in March 2020 and the second in March 2021,

After the performance parameter monitoring period ended in December 2019, the plan was terminated without payment of the intended remuneration,

ii, ILP Technologia

It is a retention plan for key positions launched in July/2019 where the participant must remain in employment until the payment date to be entitled to receive it,

Each executive had a reference value defined in Reais, which was converted into shares of Santander Brasil (SANB11) at a price of R$44,66, which will be delivered in July 2022, with a restriction of 1 year,

 

 

Payment is 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 rules and exposure to excessive risks,

Number of

Grant

Group of

Exercise

Exercise

Shares

Year

Employees

Start Date

End Date

ILP Tecnologia

123,158 

2019 

Executives

jul/2019

jun/2022

Balance of Plans on September 30, 2020

123,158 

In 2020, there were no shares delivered or canceled in the plan,

iii, ILP Pi Investimentos

It is a retention plan for key positions launched in May/2019, where the participant must remain in employment until the payment date,

The agreed ILP values ​​for each participant will be obtained from the determination of the achievement of indicators in two moments: 2020 and 2021,

Payment will be made in SANB11 shares, 50% in March 2022 and 50% in March 2023, with a restriction of 1 year after each payment and is 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 rules and exposure to excessive risks,

2020 Indicators

2021 Indicators

Active Customers - customers with average monthly balance

Active Customers - customers with average monthly balance

Portfolio (AuM) - volume distributed including account balance

Portfolio (AUM) - volume distributed including account balance

Revenue 2020

Revenue 2021

BAI (Profit before tax indicator)

 

In May 2020, the provision recorded for ILP Pi Investimentos was canceled and reversed, due to the impossibility of meeting the plan's performance target, The amount of the expense with the provision for this plan recorded up to 05/2020 was R$ 4,851,

iv, ILP Ben

It is a retention plan for key positions launched in May/2019, where the participant must remain in employment until the payment date,

The agreed ILP values ​​for each participant will be obtained from the determination of the achievement of indicators in two moments: 2020 and 2021,

Payment will be made in SANB11 shares, 50% in March 2022 and 50% in March 2023, with a restriction of 1 year after each payment and is 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 rules and exposure to excessive risks,

Indicators

Number of PJ Clients

Number of PF Customers

Number of Accredited Establishments

Revenues

BAI

 

v, ILP DTA

This is an incentive plan to boost the digital transformation of Santander, launched in September / 2019, in which the participant must remain in employment until payment,

The eligible executives had a target defined in Reais and the payment will be calculated based on the measurement of the performance indicators in two moments: first period for measuring the fulfillment of key objectives (2019) and second period for determining the payment amount (2020, 2021 and 2022),

If the objectives of the plan are met, payment will be made in March 2023,

ILP DTA will be measured based on the performance of the following global initiatives:

·         Global Trade Service Platform (GTS)

·         Global Merchant Services (GMS) Platform

·         OpenBank (OB)

·         SuperDigital (SD)

Additional Objectives

 

 

·         Digital Assets

·         Digital Centers of Excellence

vi, ILP High Performance

It is an incentive plan for key positions launched in August / 2020 where the participant must remain in employment until the payment date to be entitled to receive it,

Each executive had a reference value defined in Reais, which was converted into shares of Santander Brasil (SANB11) at a price of R$ 29,18 and which will be delivered in September 2023, with a restriction of 1 year,

Payment is 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 rules and exposure to excessive risks,

a,2) Variable Remuneration Referenced to Shares

In the long-term incentive plan (deferral), the requirements for payment of future deferred installments of variable remuneration are determined, considering the long-term sustainable financial bases, including the possibility of applying reductions or cancellations depending on the risks assumed and fluctuations of the cost of capital,

The variable remuneration plan with payment referenced in Banco Santander shares is divided into 2 programs: (i) Identified Collective and (ii) Other Employees, The impacts on the result are recorded in the Personnel Expenses item, as follows:

Bank

Consolidated

Program

Participant

Liquidity Type

01/01 a 09/30/2020

01/01 a 09/30/2019

01/01 a 09/30/2020

01/01 a 09/30/2019

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)

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)

 

27.   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 Engagement;

     Independence of risk control and management functions;

     Comprehensive approach to management and control of risks;

     Risk management and control must be based on timely, accurate and sufficiently granular management information,

A, Credit Risk     

The credit risk management is based in monitoring of credit portfolio and new credit operation indicators, Considering the economic scenario, profitability and defaults projections are estimated under control of appetite for risk, These projections are the basis for a redefinition of credit policies, which affect both the credit evaluation for a specific customer as  customers with similar profile,

Another relevant aspect is the preventive management of credit, which is fundamental in maintaining the quality of Banco Santander's portfolio, The monitoring of the customer portfolio is a daily routine of the entire commercial area, with the support of the central areas,

To measure the quality of a client’s or facility’s credit, the Bank uses its own models score/rating, made by Metodology and independent Validation areas,

On credit restructuring and recovery the Bank uses specific collection teams, which may be:

• Internal teams specializing in with direct action against defaulting clients with delays exceeding 60 days and more significant amounts; and

• External partners specializing in collecting, notifying and filing high-risk clients,

Sale of non-performing loans portfolio is a recurrent part of the recovery strategy (only credit rights), but the Santander may maintain relationships and transactional means with assigned clients,                                                                                                                                                   

 

 

Besides, the bank constitutes provision in accordance with the current legislation of Bacen and National Monetary System (Note 8,e),

B, Market Risk Management

The management of the market risk consists on developing, measuring and monitoring the use of limits previously approved in internal committees, relevant to the value at risk of the portfolios, the sensitivities arising from variation in market data (interest rates, indices, prices, exchange rates, etc,), liquidity gaps, among others, which might affect the positions of Banco Santander's portfolios in the various markets where it operates,

C, Operational Risk and Internal Controls

Santander's operational risk management model is based on 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 proactive focus on this risk, policies, implementation of process, including monitoring, training, advisory, risk assessment and corporate communication of standards and regulations to be applied to each businesses area of the Banco Santander,

F, Unit for the Anti Money Laundering (AML) and Coutering of Financing of Terrorism (CFT)

Area responsible for promoting the development of the prevention of money laundering and combating the financing of terrorism in the different business units, as well as responsible for the Bank's Know Your Customer guidelines, establishing policies, procedures, monitoring and culture related to the subject, Moreover analyzing the AML/CFT risks in the products and services monitoring the product´s risk and transactions carried out,

G, Social and Environmental Risk

Banco Santander’s Social and Environmental Responsibility Policy (PRSA), which complies with National Monetary Council Resolution 4,327/2014 and the SARB 14 self-regulation issued by Febraban, establishes guidelines and consolidates specific policies for social-environmental practices used in business and stakeholder relations, These practices including social and environmental risk management, impacts and opportunities related themes, such as, adequacy in the concession or use of credit, supplier management and analysis of the social and environmental risk which is carried out through the analysis of the socio-environmental practices of wholesale and segment Empresas 3 retail clients, that have limits or credit risk greater than BRL5 million and are included in one of the 14 sectors of social and environmental attention, In other to mitigate operational, capital, credit and reputational risk, Since 2009 Santander is Equator Principles signatory, which standards are applied in order to mitigate social and environmental risks when financing big projects,

The commitments assumed in the PRSA are detailed in others Bank policies, such as, the Anti-Corruption Policy, Supplier Relationships and Homologation Policies and Social-Environmental Risk Policies, besides that the Private Social Investment Policy, which aims to guide the strategy of this topic and present guidelines for social programs that strengthen this strategy,

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,ri,santander,com,br/

b) Operational Limits

As established in CMN Resolution No, 4,193 / 2013, the requirement for PR in 2019 was 10,5%, comprising 8,0% of Minimum Equity of Reference plus 2,5% of Additional Capital Conservation, Considering this surcharge, PR Level I increased to 8,5% and Minimum Principal Capital to 7,0%,

For the base year 2020, the PR requirement remains at 11,5%, including 8,0% of Reference Equity Minimum, plus 2,5% of Capital Conservation Additional and 1,0% of Systemic Additional, PR Level I reaches 8,25% and Minimum Principal Capital 6,75%,

09/30/2020

12/31/2019

Tier I Regulatory Capital

76,23,294 

66,481,661 

Principal Capital

68,983,783 

61,389,509 

Supplementary Capital (Note 20)

7,252,510 

5,092,153 

Tier II Regulatory Capital (Note 20)

7,221,222 

5,083,808 

Regulatory Capital (Tier I and II)

82,456,516 

71,565,469 

Credit Risk (1)

485,855,577 

407,786,238 

Market Risk (2)

18,288,517 

20,235,208 

Operational Risk

57,419,401 

47,965,481 

Total RWA (3)

561,563,495 

475,986,927 

Basel I Ratio

13.58 

13.97 

Basel Principal Capital

12.28 

12.90 

Basel Regulatory Capital

14.86 

15.04 

(1) The credit risk exposures subject to the calculation of the capital requirement using a standardized approach (RWACPAD) are based on the procedures established by Circular Bacen 3,644, of March 4, 2013 and their subsequent complementations through the wording of Circular Bacen 3,174 of August 20, 2014 and Circular Bacen 3,770 of October 29, 2015,

(2) Includes installments for market risk exposures subject to variations in the rates of foreign currency coupons (RWAjur2), price indices (RWAjur3) and interest rate (RWAjur1 / RWAjur4), in the price of commodities (RWAcomur) ), the price of shares classified in the trading portfolio (RWAacs) and installments for exposure of 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 on a quarterly basis with information on risk management, a brief description of the Recovery Plan, capital management, PR and RWA, The report with more details of the premises, structure and methodologies can be found at www,santander,com,br/ri,

Financial institutions are obliged to maintain the application of resources in permanent assets in accordance with the level of adjusted Reference Equity, The resources invested in permanent assets, calculated on a consolidated basis, are limited to 50% of the value of the Reference Equity adjusted according to the regulations in force, Banco Santander is within the established requirements,

c) Financial Instruments - Sensitivity Analysis

Risk management is focused on portfolios and risk factors, in accordance with Bacen regulations and international good practices,

Financial instruments are segregated into the trading and banking portfolios, as carried out in the management of market risk exposure, in accordance with the best market practices and with the classification criteria for operations and capital management of the Basen Standardized Basel Method , The trading portfolio consists of all transactions with financial instruments and commodities, including derivatives, maintained with the intention of trading, The banking portfolio consists of structural operations arising from the different business lines of Banco Santander and their possible hedges, Accordingly, according to the nature of Banco Santander activities, the sensitivity analysis was divided between the trading and banking portfolios,

Banco Santander performs the sensitivity analysis of financial instruments in accordance with CVM Instruction nº, 475/2008, considering market information and scenarios that would negatively affect the Bank's positions,

The summary tables presented below summarize the sensitivity values ​​generated by the corporate systems of Banco Santander, referring to the trading portfolio and the banking portfolio, for each of the scenarios of the portfolios of March 31, 2019,

Trading Portfolio

Consolidated

 

 

 

Risk Factor

Description

Scenario 1

Scenario 2

Scenario 3

Interest Rate - Real

 Exposures subject to Changes in Interest Fixed Rate

(15,858) 

(236,768) 

(473,535) 

Coupon Interest Rate

 Exposures subject to Changes in Coupon Rate of Interest Rate

(1,047) 

(11,105) 

(22,209) 

Coupon - US Dollar

 Exposures subject to Changes in Coupon US Dollar Rate

(33,905) 

(247,690) 

(495,381) 

Coupon - Other Currencies

 Exposures subject to Changes in Coupon Foreign Currency Rate

(1,623) 

(3,116) 

(6,232) 

Foreign Currency

 Exposures subject to Foreign Exchange

(33) 

(5,507) 

(11,014) 

Eurobond/Treasury/Global

 
Exposures subject to Interest Rate Variation on Papers Traded on the International Market

(4,455) 

(111,386) 

(222,773) 

Inflation

 Exposures subject to Change in Coupon Rates of Price Indexes

(653) 

(234) 

(467) 

Shares and Indexes

 Exposures subject to Change in Shares Price

(413) 

(10,322) 

(20,643) 

Commodities

 Exposures subject to Change in Commodity Price

(2) 

(42) 

(85) 

Total (1)

(57,989)

(626,169)

(1,252,339)

(1) Amounts net of tax effects,

Scenario 1: shock of + 10bps and -10bps in the interest curves and 1% for price changes (currencies and shares), considering the largest losses by risk factor,

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

(46,878) 

(61,510) 

(157,729) 

TR and Long-Term Interest Rate - (TJLP)

 Exposures subject to Change in Exchange TR and TJLP
 

(29,044) 

(246,198) 

(380,095) 

Inflation

 Exposures subject to Change in Coupon Rates of Price Indexes

(31,938) 

(163,836) 

(344,781) 

Coupon - US Dollar

 Exposures subject to Changes in Coupon US Dollar Rate

(4,022) 

(105,208) 

(202,884) 

Coupon - Other Currencies

 Exposures subject to Changes in Coupon Foreign Currency Rate

(8,293) 

(87,874) 

(126,687) 

Interest Rate Markets International

 Exposures subject to Changes in Interest Rate Negotiated Roles in International Market

(15,805) 

87,394 

264,837 

Foreign Currency

 Exposures subject to Foreign Exchange

(40) 

(1,004) 

(2,009) 

Total (1)

(136,020)

(578,236)

(949,348)

(1) Amounts net of tax effects,

Scenario 1: shock of + 10bps and -10bps in the interest curves and 1% for price changes (currencies and shares), considering the largest losses by risk factor,

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,

 

28.   Other information

a) Co-obligations and risks in guarantees provided to customers, recorded in memorandum accounts, reached the amount of R$ 44,109,660 (12/31/2019 - R$41,660,754) in the Bank and R$ 44,109,660 (12/31/2019 - R$41,660,772) in the Consolidated,

b) The total value of investment funds and assets under management of the Santander Conglomerate is R$ 2,755,952 (12/31/2019 - R$2,034,999) and the total investment funds and assets under management is R$ 201,874,075 (12/31/2019 - R$230,199,261) recorded in memorandum accounts,

c) Insurance in force on September 30, 2020, in the form of fires, vehicles and others, has a coverage value of R$ 1,829,578 (12/31/2019 - R$1,829,578) at the Bank and R$ 1,821,864 (12/31/2019 – R$1,821,864) in Consolidated and in the global modality of banks, an insurance with a coverage value of R$ 392,189 (12/31/2019 - R$392,189) was contracted in the Bank and Consolidated, which can be used alone or in as long as it does not exceed the contracted amount, In addition, at the Bank and the Consolidated on September 30, 2020, there are other policies in force related to other assets in the amount of R$ 7,623,279 (2019 - R$7,623,279),

d) Between September 30, 2020 and December 31, 2019, there were no linked asset transactions and obligations for linked asset transactions,

e) Clearing and Settlement Agreements - CMN Resolution nº 3,263/2005 - Banco Santander has an agreement for the compensation and settlement of obligations under the National Financial System (SFN), signed with individuals and legal entities, whether or not members of the SFN, resulting in in greater guarantee of financial settlement, with the parties that have this modality of agreement, These agreements establish that the payment obligations to Banco Santander arising from credit and derivative operations, in the event of default by the counterparty, will be offset against Banco Santander's payment obligations to the counterparty,

 

 

f) Other Obligations - Banco Santander rents properties, mainly used for branches, based on a standard contract which may be cancelled at its own criteria and includes the right to opt for renewals and adjustment clauses, classified as operating lease, The total of the future minimum payments of non-cancellable operating leases is shown below:

30/09/2020

31/12/2019

Up to 1 Year

674,217 

651,207 

Between1 to 5 Years

1,623,611 

1,492,289 

More than 5 Years

176,185 

147,125 

Total

674,217 

2,290,621 

 

Additionally, Banco Santander has contracts with no maturity date determined, totaling R$679 (12/31/2019 - R$918) corresponding to the monthly rent contracts with this feature, Operating lease payments, recognized as expenses in the third quarter of 2020, amounted to R$ 363,338 (2019 - R$700,958),

The rental contracts will be readjusted annually, according to the legislation in force, and the highest percentage is according to the variation of the General Market Price Index (IGPM), The lessee is guaranteed the right to unilaterally terminate these contracts, at any time, in accordance with contractual clauses and legislation in force,

g) Incorporation of the spun-off portion of Integry Tecnologia e Serviços A,H,U Ltda,

On October 31, 2019, the partial spin-off of Integry Tecnologia e Serviços AHU Ltda, Was approved, (“Integry”), a wholly owned subsidiary of Getnet Adquirência e Serviços para Means of Payment S,A (“Getnet”), with a version of the spun-off portion of its assets, referring to its assets and liabilities, to Getnet, The incorporation of the spun-off portion by Getnet is pending approval by the Central Bank of Brazil,

On December 20, 2019, Getnet and Santander Merchant Platform Solutions, SL (“SMPS Global”), a company headquartered in Spain and controlled by Banco Santander, SA (Santander Spain), entered into a Purchase and Sale Agreement of the representative shares of Integry's total share capital, so that SMPS Global now holds 100% of Integry's share capital, On December 23, 2019, Integry changed its name to Santander Merchant Platform Solutions Brasil Ltda,

h) Pandemic Effects - COVID-19

The Bank monitors the effects of this pandemic that affect its operations and that may adversely affect its results, Since the beginning of the pandemic in Brazil, Committees have been set up to monitor the effects of the spread and its impacts, in addition to government actions to mitigate the effects of COVID-19,

The Bank maintains its operational activities, observing the protocols of the Ministry of Health and other Authorities, Among the actions taken, we highlight (a) the dismissal of employees from the risk group and intensification of work in the home office, (b) the definition of a follow-up protocol, with health professionals, for employees and family members who have the symptoms of Covid19 and (c) increased communication about preventive measures and remote means of care,

The Federal Government through the National Monetary Council and the Central Bank of Brazil has adopted measures to mitigate the impacts caused by COVID-19, specifically on credit operations, fundraising, reduction of reserve requirements and aspects related to capital, such as ( a) measures to facilitate the renegotiation of credit operations without an increase in provisions, (b) a reduction in capital requirements, in order to expand the credit system's ability to grant credit and (c) a reduction in reserve requirements, , to improve liquidity conditions,

As of the date of this disclosure, the Bank has identified (a) increase in loan and financing operations, especially for companies; (b) increase in requests for renegotiation and extension of terms for credit operations; (c) impacts on the allowance for loan losses and (d) increase in funds raised,

Future impacts related to the pandemic, which have a certain degree of uncertainty as to their duration and severity and which, therefore, cannot be accurately measured at this time, will continue to be monitored by Management,

 

 

29. Subsequent Events

Determination of Interest on Equity

The Board of Directors, in a meeting held on October 26, 2020, approved the Executive Board's proposal, ad referendum of the Ordinary General Meeting to be held until April 30, 2021, for the distribution of Interest on Equity, in the gross amount of R$ 1,000 million , which, after deducting the amount related to income tax withheld at source, in accordance with current legislation, imports a net amount of R$ 850 million, with the exception of immune and / or exempt shareholders, Shareholders who are registered in the

 

 

Company's records at the end of November 4, 2020 (inclusive) will be entitled to Interest on Equity, Accordingly, as of November 5, 2020 (inclusive), the Company's shares will be traded “Ex-Interest on Equity”, The amount of Interest on Equity will be paid as of December 23, 2020 and fully charged to the mandatory dividends to be distributed by the Company for the year 2020, without any monetary restatement, The decision was approved by the Fiscal Council, according to a meeting held on the same date, and is in compliance with the provisions of CMN Resolution No, 4,820 / 2020,

 

Disposal of Investments in Norchem Participações e Consultoria S,A, (NPC) and Norchm Holdings e Negócios S,A, (NHN)

On October 8, 2020, Banco Santander (Brasil) SA sold its stake in Norchem Participações e Consultoria SA (50% stake) and Norchem Holdings e Negócios SA (22% stake), through a capital reduction and consequent cancellation of the shares held by Banco Santander (Brasil) SA, for which the Bank will receive an amount of approximately R $ 42 million,

 

 

 

 

 

 

 


 

 

Composition of Management Bodies

Administrative Council

Álvaro Antônio Cardoso de Souza – President

Sérgio Agapito Lires Rial - Vice-President

Deborah Patricia Wright - Counselor (independent)

Deborah Stern Vieitas - Counselor (independent)

Jose Antonio Alvarez Alvarez – Counselor

José de Paiva Ferreira – Counselor

José Maria Nus Badía – Counselor

Marília Artimonte Rocca - Counselor (independent)

Pedro Augusto de Melo - Counselor (independent)

 

Audit Committee

Deborah Stern Vieitas - Coordinator

Luiz Carlos Nannini - Qualified Technical Member

Maria Elena Cardoso Figueira - Member

René Luiz Grande - Member

Risk and Compliance Committee

Pedro Augusto de Melo - Coordinator

Álvaro Antonio Cardoso de Souza - Member

José de Paiva Ferreira - Member

Virginie Genès-Petronilho - Member

Sustainability Committee

Marilia Artimonte Rocca - Coordinator

Carlos Aguiar Neto - Member

Carlos Rey de Vicente - Member

Mario Roberto Opice Leão - Member

Tarcila Reis Corrêa Ursini - Member

Nomination and Governance Committee

Álvaro Antonio Cardoso de Souza - Member

Deborah Patricia Wright - Member

Luiz Fernando Sanzogo Giogi - Member

Compensation Committee

Deborah Patricia Wright - Coordinator

Álvaro Antonio Cardoso de Souza - Member

Luiz Fernando Sanzogo Giogi - Member

Fiscal Council

João Guilherme de Andrade So Consiglio - Effective Member (President)

Antonio Melchiades Baldisera - Effective member

Louise Barsi - Effective Member

Manoel Marcos Madureira - Substitute

Luciano Faleiros Paolucci - Substitute

Valmir Pedro Rossi – Substitute

 

*The Fiscal Council was installed at the Annual and Extraordinary Shareholders' Meetings held on April 30, 2020, and the members were approved by the Central Bank of Brazil on July 10, 2020, the date on which they took office in their respective positions, with a mandate until the 2021 Annual General Meeting,

 

 

Executive Board

 

Chief Executive Officer                   

Sérgio Agapito Lires Rial

 

Vice-President Executive Officer and Investor Relations Officer                       

Angel Santodomingo Martell           

 

Vice-President Executive Officers               

Alberto Monteiro de Queiroz Netto

Alessandro Tomao              

Antonio Pardo de Santayana Montes             

Carlos Rey de Vicente

Ede Ilson Viani     

Jean Pierre Dupui               

Juan Sebastian Moreno Blanco                        

Mário Roberto Opice Leão

Patrícia Souto Audi

Vanessa de Souza Lobato Barbosa

 

Officers without specific designation                                         

Amancio Acúrcio Gouveia

Ana Paula Vitali Janes Vescovi

André de Carvalho Novaes

Carlos Aguiar Neto               

Cassio Schmitt       

Claudenice Lopes Duarte

Daniel Fantoni Assa

Elita Vechin Pastorelo Ariaz                

Franco Luigi Fasoli

Geraldo José Rodrigues Alckmin Neto

Germanuela de Almeida de Abreu

Gustavo Alejo Viviani           

Igor Mario Puga

Jean Paulo Kambourakis 

João Marcos Pequeno De Biase

José Teixeira de Vasconcelos Neto 

Luis Guilherme Mattos de Oliem Bittencourt

Luiz Masagão Ribeiro Filho 

Marcelo Augusto Dutra Labuto

Marino Alexandre Calheiros Aguiar

Ramón Sanchez Díez

Ramon Sanchez Santiago    

Reginaldo Antonio Ribeiro

Roberto Alexandre Borges Fischetti

Robson de Souza Rezende

Sandro Kohler Marcondes

Sandro Rogério da Silva Gamba      

Thomas Gregor Ilg                

Vítor Ohtsuki

 

Accountant

 

Gilberto Cabeleira Alves – CRC Nº PR040031/ O-7


Declaration of directors on the financial statements

For the purposes of complying with the provisions of article 25, paragraph 1, item VI, of the Securities Commission (CVM) Instruction 480, of December 7, 2009, the members of the Executive Board of Banco Santander (Brasil) SA (Banco Santander or Company) declare that they discussed, reviewed and agreed with the Financial Statements prepared by Banco Santander´s BRGAAP criteria, for the year ended September 30, 2020, and the documents that comprise them, being: Management Report, balance sheets, statement results, statement of changes in equity, statement of cash flows, statement of added value and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No, 6,404, of December 14, 1976 (Brazilian Corporate Law), the rules of the National Monetary Council, of the Central Bank of Brazil according to the model of Plan C of the National Financial System Institutions (COSIF) and other applicable regulations and legislation, The aforementioned Financial Statements and the documents that comprise them, were the subject of a report without reservation by the Independent Auditors regarding the recommendation for approval issued by the Company's Audit Committee and the favorable opinion of the Company's Fiscal Council,

 

Members of the Executive Board of Banco Santander on September 30, 2020:

 

Chief Executive Officer                        

Sérgio Agapito Lires Rial

 

Vice-President Executive Officer and Investor Relations Officer                    

Angel Santodomingo Martell

 

Vice-President Executive Officers                      

Alberto Monteiro de Queiroz Netto

Alessandro Tomao

Antonio Pardo de Santayana Montes    

Carlos Rey de Vicente

Ede Ilson Viani      

Jean Pierre Dupui  

Juan Sebastian Moreno Blanco                             

Mário Roberto Opice Leão

Patrícia Souto Audi

Vanessa de Souza Lobato Barbosa

 

Officers without specific designation                               

Amancio Acúrcio Gouveia

Ana Paula Vitali Janes Vescovi

André de Carvalho Novaes

Carlos Aguiar Neto

Cassio Schmitt

Claudenice Lopes Duarte

Daniel Fantoni Assa

Elita Vechin Pastorelo Ariaz

Franco Luigi Fasoli

Geraldo José Rodrigues Alckmin Neto

Germanuela de Almeida de Abreu

Gustavo Alejo Viviani            

Igor Mario Puga

Jean Paulo Kambourakis

João Marcos Pequeno De Biase

José Teixeira de Vasconcelos Neto

Luis Guilherme Mattos de Oliem Bittencourt

Luiz Masagão Ribeiro Filho

Marcelo Augusto Dutra Labuto

Marino Alexandre Calheiros Aguiar 

Ramón Sanchez Díez

Ramon Sanchez Santiago

Reginaldo Antonio Ribeiro

Roberto Alexandre Borges Fischetti

Robson de Souza Rezende

Sandro Kohler Marcondes

Sandro Rogério da Silva Gamba           

Thomas Gregor Ilg

Vítor Ohtsuki


 

Directors' Statement on Independent Auditors

For the purposes of complying with the provisions of article 25, paragraph 1, item V, of the Securities and Exchange Commission (CVM) Instruction 480, of December 7, 2009, the members of the Executive Board of Banco Santander (Brasil) SA (Banco Santander or Company) declare that they have discussed, reviewed and agreed with the Financial Statements by the Banco Santander BRGAAP criterion, which includes the Independent Auditors' Report, related to the Financial Statements by Banco Santander BRGAAP criterion, for the year ended September 30, 2020 , and the documents that comprise them, being: Performance Comments, balance sheets, income statement, statement of changes in equity, statement of cash flows, statement of added value and explanatory notes, which were prepared in accordance with accounting practices adopted in Brazil, in accordance with Law No, 6,404, of December 14, 1976 (Brazilian Corporate Law) tions), the rules of the National Monetary Council, the Central Bank of Brazil in accordance with the model of the Accounting Plan of the Institutions of the National Financial System (COSIF) and other applicable regulations and legislation, The aforementioned Financial Statements and the documents that comprise them, were the subject of a report without reservation by the Independent Auditors regarding the recommendation for approval issued by the Company's Audit Committee and the favorable opinion of the Company's Fiscal Council,

 

Members of the Executive Board of Banco Santander on September 30, 2020:

 

Chief Executive Officer                        

Sérgio Agapito Lires Rial

 

Vice-President Executive Officer and Investor Relations Officer                    

Angel Santodomingo Martell

 

Vice-President Executive Officers                      

Alberto Monteiro de Queiroz Netto

Alessandro Tomao

Antonio Pardo de Santayana Montes    

Carlos Rey de Vicente

Ede Ilson Viani      

Jean Pierre Dupui  

Juan Sebastian Moreno Blanco                             

Mário Roberto Opice Leão

Patrícia Souto Audi

Vanessa de Souza Lobato Barbosa

 

Officers without specific designation                               

Amancio Acúrcio Gouveia

Ana Paula Vitali Janes Vescovi

André de Carvalho Novaes

Carlos Aguiar Neto

Cassio Schmitt

Claudenice Lopes Duarte

Daniel Fantoni Assa

Elita Vechin Pastorelo Ariaz

Franco Luigi Fasoli

Geraldo José Rodrigues Alckmin Neto

Germanuela de Almeida de Abreu

Gustavo Alejo Viviani            

Igor Mario Puga

Jean Paulo Kambourakis

João Marcos Pequeno De Biase

José Teixeira de Vasconcelos Neto

Luis Guilherme Mattos de Oliem Bittencourt

Luiz Masagão Ribeiro Filho

Marcelo Augusto Dutra Labuto

Marino Alexandre Calheiros Aguiar

Ramón Sanchez Díez

Ramon Sanchez Santiago

Reginaldo Antonio Ribeiro

Roberto Alexandre Borges Fischetti

Robson de Souza Rezende

Sandro Kohler Marcondes

Sandro Rogério da Silva Gamba           

Thomas Gregor Ilg

Vítor Ohtsuki         

 

 

 

 

SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

Date: October 26, 2020

 

Banco Santander (Brasil) S.A.

By:

/SAmancio Acurcio Gouveia 


 

Amancio Acurcio Gouveia
Officer Without Specific Designation

 

 

By:

/SCarlos Rey de Vicente


 

Carlos Rey de Vicente
Vice - President Executive Officer