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