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BSBR Banco Santander

Filed: 28 Jul 21, 8:53am

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of June, 2021


 

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.. 2

Balance Sheet 14

Statement of Income. 18

Statement of Comprehensive Income. 19

Statement of Changes in Stockholders' Equity – Bank. 20

Statement of Changes in Stockholders' Equity – Consolidated. 21

Statement of Cash Flows. 23

Statement of Value Added. 24

1.General Information. 25

2.Presentation of Financial Statements. 25

3.Significant Accounting Policies. 25

4.Cash and Cash Equivalents. 33

5.Interbank Investments. 33

6.Securities and Derivatives Financial Instruments. 35

7.Interbank Accounts. 51

8.Credit Portfolio and Allowance for Expected Losses Associated with Credit Risk. 51

9.Other Financial Assets. 54

10.Tax Assets and Liabilities. 55

11.Other Assets. 59

12.Dependences Information and Foreign Subsidiary. 59

13.Investments in Affiliates and Subsidiaries Subsidiary. 60

14.Fixed Assets. 65

15.Intangibles. 66

16.Funding. 67

17.Other Financial Liabilities. 70

18.Other Payables. 70

19.Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security. 71

20.Stockholders’ Equity. 75

21.Related Parties. 77

22.Income from Services Rendered and Banking Fees. 85

23.Personnel Expenses. 85

24.Other Administrative Expenses. 85

25.Other Operating Income. 85

26.Other Operating Expenses. 85

27.Non-Operating Income. 86

28.Employee Benefit Plans. 86

29.Risk Management, Capital and Sensitivity Analysis. 92

30.Other information. 96

31.Subsequent Event 99

Composition of Management Bodies. 99

Declaration of directors on the financial statements. 102

Directors' Statement on Independent Auditors. 102

Audit Committee Report 103

Opinion of the Fiscal Council 105

 

 

 

 

 

 

 

 

 

 



Performance Review

Dear Stockholders:

We are presenting the Performance Commentary to the Individual and Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Banco) for the semester ended June 30, 2021, prepared in accordance with accounting practices adopted in Brazil, established by the Law of Corporations, in conjunction with the rules of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and the document model provided for in the Accounting Plan for National Financial System Institutions (Cosif) and the Securities Commission (CVM) , which do not conflict with the norms issued by Bacen.

The Condensed Consolidated Interim Financial Statements prepared based on the international accounting standards issued by the International Accounting Standards Board (IASB) for the semester ended June 30, 2021 were simultaneously disclosed on the website www.santander.com.br/ri.

1. Macroeconomic Environment

At the end of the second quarter of 2021, Banco Santander observed the median of projections regarding the performance of the Brazilian economy indicating a growth of the Brazilian GDP of 4.85% in 2021, compared to a contraction of 4.06% in the previous year. The projection for 2021 is higher than that observed at the end of the first quarter (3.17%) and, in the Bank's assessment, it was influenced by the recent publication that the actual result observed in that period was beyond the market consensus - the median of the estimates indicated a seasonally adjusted quarterly expansion of 0.9% for the first quarter of 2021. The economic activity data released contrasted with our GDP growth estimate for the previous quarter (we also estimated a 0.9% increase) and changed our expectation that the Brazilian economy will grow 3.6% in 2021. Preliminarily, we changed our GDP growth forecast to 4.9% this year.

Also, in the second quarter of 2021, the Bank witnessed the interannual variation of the IPCA reaching 8.1%, a level well above the target set for 2021 (3.75%) and also higher than the 5.9% projected by Santander for this year. The Bank understands that this inflationary environment and its balance of risks were the motivators for the Central Bank of Brazil to raise the basic interest rate of 2.75% p.a. to 4.25% p.a. between the closings of the first and second quarters of 2021. Santander believes that this approach to the Selic rate increases the chance that inflation will converge to the established targets within the relevant time horizon for monetary policy. In this sense, the Bank projects that the Selic rate will reach 6.50% p.a. at the end of 2021 and 7.00% p.a. at the end of 2022.

Regarding the behavior of the exchange rate, Banco Santander saw the quotation of the Brazilian currency against the US dollar close the second quarter of 2021 quoted at R$5.06/US$. That is, below the price of R$5.63/US$ seen at the end of the previous quarter. This trajectory of appreciation of the real is in line with the Bank's forecast that the exchange rate will end the year 2021 quoted at R$5.25/US$.

The performance of the aforementioned variables took place in the midst of an international environment that the Bank considered favorable and which highlighted the following topics: advances in immunization programs against COVID-19 in advanced economies; faster economic recovery of the world economy; emergence of inflationary pressures and; discussion about the possible reversal of monetary stimuli granted in several economies – with emphasis on the USA. In fact, the themes are intertwined, since the progress in the immunization process – mainly in advanced economies – allowed for a faster recovery in different parts of the globe and generated some bottlenecks in important production chains. In turn, these bottlenecks ended up causing problems in the production of some products – automobiles, for example – and caused a rise in prices that were captured by the inflation indices. Faced with a less relaxed inflationary scenario – albeit caused by some temporary setbacks – the Bank saw a growing discussion about the possibility of reversing the monetary incentive policies that were widely adopted to support demand during the pandemic. For the Bank, this discussion explained the recording of some volatility in asset prices, mainly in the US fixed income market.

In the domestic environment, the Bank understands that the main themes were as follows: lethargy in the immunization program against COVID-19, continuity of the interest rate normalization process; persistence of inflationary pressures; more robust economic activity indices than previously imagined and; reduction of risk perception regarding the Brazilian fiscal framework. For the Bank, the fact that the Brazilian economy showed robust economic growth in 1Q21, despite the worsening of the pandemic scenario and the absence of tax incentives in the period, was a very positive surprise. For the Bank, the performance showed that even the adoption of measures to restrict mobility and the lower mass of income did not prevent the economy from remaining on a path of recovery. For the Bank, this may be the explanation for the extension of inflationary pressures that led the Brazilian monetary authority to signal the continuity of the monetary policy normalization process. Finally, the Bank recognizes that circumstantial elements have resulted in an improvement in the perception of risk regarding government debt in the coming years, as the starting point of its trajectory should be lower than previously imagined. However, the Bank continues to draw attention to the worrying structural dynamics that it could follow in the absence of structural reforms in the near future.

2. Performance 

2.1) Corporate Income    

 

Consolidated Income Statements (R$ Millions)

1S21

1S20

annual changes%

2Q21

1Q21

quarter changes %

Financial Income

30,253.1 

79,563.5 

(62.0) 

(7,503.8) 

37,756.9 

(119.9) 

Financial Expenses

(8,898.7) 

(79,909.1) 

88.9 

20,918.0 

(29,816.7) 

(170.2) 

Gross Profit From Financial Operations (a)

21,354.4  

(345.6)

6.278.9 

13,414.2  

7,940.2 

68.9  

Other Operating (Expenses) Income (b)

(7,528.1) 

(6,120.7) 

23.0 

(3,492.5) 

(4,035.6) 

(13.5) 

Operating Income

13,826.3  

(6,466.3)

(313.8)

9,921.7  

3,904.6 

154.1  

Non-Operating Income

28.1 

236.6 

(88.1) 

(1.1) 

29.2 

(103.8) 

Income Before Taxes on Income and Profit Sharing

13,854.3  

(6,229.8)

(322.4)

9,920.5  

3,933.8 

152.2  

Income Tax and Social Contribution (a)

(5,926.9) 

13,065.9 

(145.4) 

(5,306.5) 

(620.4) 

755.3 

Profit Sharing

(940.5) 

(963.5) 

(2.4) 

(468.6) 

(471.9) 

(0.7) 

Non-Controlling Interest

(67.9) 

(73.0) 

(7.0) 

(42.6) 

(25.3) 

68.5 

Consolidated Net Income

6,919.1  

5,799.6 

19.3  

4,102.9 

2,816.3 

45.7  

 

OPERATING RESULT BEFORE ADJUSTED TAXATION

1S21

1S20

annual
variation%

2Q21

1Q21

annual
variation%

(R$ Million)

Result before Taxation on Profit and Participation

13,854.3 

(6,229.8) 

(322.4) 

9,920.5 

3,933.8 

152.2 

Foreign Exchange Hedge

(792.4) 

15,447.4 

(105.1) 

(2,841.9) 

2,049.5 

(238.6) 

Operating Income Before Adjusted Taxation

13,061.9  

9,217.6 

41.7  

7,078.6  

5,983.3 

18.3  

INCOME TAX

1S21

1S20

annual
variation%

2Q21

1Q21

annual
variation%

(R$ Million)

Income tax and social contribution

(5,926.9) 

13,065.9 

(145.4) 

(5,306.5) 

(620.4) 

755.3 

Foreign Exchange Hedge

792.4 

(15,447.4) 

(105.1) 

2,841.9 

(2,049.5) 

(238.6) 

Adjusted Income Tax and Social Contribution

(5,134.5)

(2,381.5)

115.6  

(2,464.6)

(2,669.9)

(7.7)

 

The annualized return for the first half of 2021, based on the accounting result on average equity, reached 17.8%, an increase of 0.7 p.p compared to the first half of 2020.

a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches

Banco Santander operates branches in the Cayman Islands and Luxembourg, which are used mainly to raise funds in the international capital and financial markets, to provide the Bank with lines of credit that are extended to its customers for trade financing abroad and working capital. To cover exposure to exchange variations, the Bank uses external funding and derivative instruments. In accordance with Brazilian tax rules, as of January 2021, 50% of the gains or losses arising from the impact of the appreciation or devaluation of the Real on foreign investments started to be computed in the determination of taxable income and in the calculation basis of the Contribution Social on Net Income (CSLL) of the investing legal entity domiciled in the country, while gains or losses on obligations and derivative instruments used as coverage are 100% taxable or deductible. The purpose of these derivative instruments is to protect net income after taxes. As of 2022, all exchange variation will be computed in the IRPJ and CSLL tax base.

The different tax treatment of such exchange differences results in volatility in the operating result and in the tax expense accounts (PIS/COFINS) and income taxes (IR/CSLL), as shown below:

Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches
(R$ Million)

1S21

1S20

annual changes%

Exchange Variation - Profit From Financial Operations

(1,944.4) 

19,283.1 

(110.08) 

Derivative Financial Instruments - Profit From Financial Operations

2,869.3 

(35,436.2) 

(108.10) 

Income Tax and Social Contribution

(792.4) 

15,447.4 

(105.13) 

PIS/COFINS - Tax Expenses

(133.4) 

705.7 

(118.91) 

 

 

 

 

 

 

2.2) Assets and Liabilities

Consolidated Balance Sheets
(R$ Millions)

Jun/21

Dec/20

semiannual changes%

Current Assets

513,258.1 

603,330.9 

(14.9) 

Long-Term Assets

427,653.9 

399,058.1 

7.2 

Total Assets

940,912.0  

1,002,389.0  

(6.1)

Current and Long-Term Liabilities

860,176.2 

921,914.6 

(6.7) 

Deferred Income

414.2 

355.5 

16.5 

Non-Controlling Interest

1,297.2 

1,150.7 

12.7 

Stockholders' Equity

79,024.4 

78,968.2 

0.1 

Total Liabilities and Stockholders' Equity

940,912.0  

1,002,389.0  

(6.1)

 

 

 

 

 

 

2.3) Stockholders’ Equity

On June 30, 2021, Banco Santander's consolidated shareholders' equity increased by 0.1% compared to December 31, 2020.

The change in Shareholders' Equity between June 30, 2021 and December 31, 2020 was mainly due to the net income for the semester in the amount of R$6,919 million, the negative equity valuation adjustment (securities and derivative financial instruments) in the amount of R$1,602 million and the capital reduction in the amount of R$2,000 million.

For additional information, see note 20.

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 and risk portions market and operational risk.

As established in CMN Resolutions No. 4,193/2013 and No. 4,783/2020, until March 2021 the PR requirement was at 10.25%, including 8.00% Minimum Reference Equity plus 1.25% Additional Conservation of Capital and 1.00% of Systemic Additional. PR Level I was 8.25% and Minimum Core Capital 6.75%.

Throughout 2021, the Capital Conservation Supplement goes through two increases, reaching 1.625% in April and 2.00% in October. Thus, in June the PR requirement is 10.625%. Considering 8.00% of Minimum Reference Equity plus 1.625% of Additional Capital Conservation and 1.00% of Systemic Additional, with the requirement of PR Level I of 8.625% and Minimum Principal Capital of 7.125%. By the end of 2021, the PR requirement reaches 11.0%, considering an 8.00% Minimum Reference Equity plus 2.00% Capital Conservation Additional and 1.00% Systemic Additional, with a requirement of PR Tier I and Minimum Principal Capital at the end of 2021 of 9.00% and 7.50%, respectively.

Continuing with the adoption of the rules established by CMN Resolution No. 4,192/2013, as of January 2015, the Prudential Consolidated, defined by CMN Resolution No. 4,280/2013, came into effect.

The index is calculated on a consolidated basis based on information from the Prudential Consolidated, as shown below:

Basel Index%

Jun/21

Dec/20

Basel I Ratio

13.66 

14.06 

Basel Principal Capital

12.58 

12.87 

Basel Regulatory Capital

14.75 

15.25 

 

2.5) Main Subsidiaries

The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the semester ended June 30, 2021, of Banco Santander's main subsidiaries:

Subsidiaries (R$ Millions)

Total Assets

Stockholders' Equity

Net
Income

Loan
Portfolio (1)

Ownership/Interest (%)

Aymoré Crédito, Financiamento e Investimento S.A.

54,518.7 

1,542.3 

730.0 

50,793.5 

100.0% 

Banco RCI Brasil S.A.

11,182.0 

1,499.5 

90.2 

9,070.7 

39.9% 

Santander Leasing S.A. Arrendamento Mercantil

14,026.8 

11,094.8 

112.7 

2,200.6 

100.0% 

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

8,723.2 

3,595.6 

491.8 

-   

100.0% 

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

2,409.2 

2,358.6 

34.0 

-   

100.0% 

Santander Corretora de Câmbio e Valores Mobiliários S.A.

1,220.0 

729.8 

49.2 

-   

100.0% 

The financial statements of the above Subsidiaries were prepared in accordance with the accounting practices adopted in Brazil, established by the Corporation Law, together with the rules of the CMN, Bacen and the document model provided for in the Accounting Plan of Cosif Institutions, of CVM, which do not conflict with the rules issued by Bacen, without the elimination of operations with affiliates.

3. Corporate Restructuring

During the semester ended June 30, 2021 and the year ended December 31, 2020, several corporate movements were implemented in order to reorganize the operations and activities of the entities in accordance with Banco Santander's business plan.

For additional information, see note 13 to the financial statements.

4. Strategy and Rating Agencies

For information regarding the Bank's strategy and rating at rating agencies, see the Results Report available at www.santander.com.br/ri.

5. Corporate Governance

The Board of Directors of Banco Santander met and resolved:

On June 1, 2021, it approved the election of Ms. Vania Maria da Costa Borgerth as a member of the Company's Audit Committee.

On May 3, 2021, it approved the election of the members of the Company's Executive Board for a new term.

On May 3, 2021, it approved the election of the members of the Advisory Committees to the Company's Board of Directors for a new term.

On April 27, 2021, it approved the proposal for the declaration and payment of interim and interim dividends totaling R$ 3 billion, paid from June 2, 2021 without any remuneration as monetary restatement.

On April 27, 2021, it approved the Management Report and the Company's Financial Statements in BRGAAP and IFRS for the first quarter of 2021.

On March 31, 2021, it approved the partial spin-off of the Company, which will result in the segregation of its shares issued by Getnet, with version 2 of the split portion to Getnet, pursuant to the Protocol and Justification of the Partial Spin-off of Santander (" Partial Spin-off”).

On March 1, 2021, it became aware of the resignation request presented by Tarcila Reis Corrêa Ursini as a member of the Company's Sustainability Committee.

On February 25, 2021, it approved the proposed spin-off of the payment means operation, carried out by the subsidiary, Getnet Acquiring and Services for Means of Payment SA (“Getnet”), in order to concentrate the Group's technology and payments business Santander within PagoNxt, a new technology-focused global payments platform.

On February 2, 2021, it approved the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen for the year ended December 31, 2020.

On February 2, 2021, it approved, continuing the buyback program that expired on November 4, 2020, a new buyback program for Units and ADRs issued by Banco Santander, directly or through its Cayman branch, to be maintained in treasury or subsequent sale.

On February 2, 2021, it approved the proposal for declaration and payment of dividends, in the amount of R$ 512 million, paid on March 3, 2021, without any remuneration as monetary restatement.

The resolutions of the Board of Directors for the year 2020 are described in the Management Report of the Individual and Consolidated Financial Statements of December 31, 2020.

6. Risk Management        

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

For more information, see note 29 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 2021.

7. People

With the public health crisis unleashed in early 2020, care has never been so much talked about. Take care of yourself and the other. And at the Bank, we continue to take care of our people, an essential element in the Company. 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 46,426 employees here in Brazil.

On the subject of Health, we designed our internal protocol of action in the containment of COVID-19, guided by Organs sanitary and health agencies. We have the Telemedicine service in partnership with Albert Einstein Hospital, guaranteeing high standard medical care for 100% of employees and their dependents, in addition to investing in the Emotional Health Program that has supported our people in adapting to and coping with social distancing.

For the development of our people, the Corporate University – Santander Academy works towards strong, transversal culture, enabling everyone, online and in person, to improve what they already know and explore new possibilities. From mandatory certifications for certain functions to Digital Leadership courses, the most important thing is to get out of your comfort zone and invest in yourself by expanding your knowledge and repertoire.

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, ensuring that everyone is aligned through recurrent and frank conversations, career guidance and special moments to reward the teams' growth.

Banco Santander values ​​a diverse environment, where every skill and every difference is valued. An example is the Affinity Group, created to promote diversity and inclusion based on the 5 pillars: Female Leadership; Racial Equity; Disabled people; Diversity of Trainings, Experiences and Generations and the LGBT+ pillar. Another good example is the Talent Show. In it, Banco Santander opens space to learn about the most different performances and explore the universe of skills that exist at the Bank, allowing interaction and fraternization among colleagues.

In the Customer sphere, we remain focused on offering the best products and services in a Simple, Personal and Fair manner. For this, the active listening process is essential and, therefore, in March 2021, we received 12 Clients remotely to participate in a coffee with our CEO, Sérgio Rial, and broadcast live to 100% of the Organization. The Consumer Day special “Café com Rial” had a record audience of 41,972 connections, placing the Customer chair as the most important in our organization and signaling that our consumers are at the center of our discussions.

The result of all these actions is the high level of engagement, evidenced by surveys that are carried out annually and that bring excellent indicators. These surveys show that at least 90% 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 loyalty, sustainable growth and investments in society, which leads Banco Santander to be the best Bank for all stakeholders.

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, based on ethical values ​​and technology at the service of people and businesses.

We recognize our role as a financial institution in fostering sustainable business, helping society to prosper. We highlight some initiatives in 2Q21:

·         We made R$27.6 billion feasible in sustainable businesses, 74% of which via bonds.

·         In line with the ambition of achieving zero net carbon emissions by 2050, we promoted Net Zero engagement for Brazil and launched initiatives for employees and customers, such as sustainable product offers and the availability of the Carbonometer, a tool that calculates the daily emission of GHG of our operation. In addition, we started replacing cards for recycled PVC

·         We launched the first Sustainable Station in Brazil, a model project with 1,454 m² of green area, which uses 70% of energy from solar panels and has a water reuse system with savings of 150 thousand liters/month.

·         We made a loan of US$ 25 MM to clean up the Novo Rio Pinheiros river, in partnership with IFC and Desenvolvimento SP, a financial institution of the Government of the State of São Paulo.

We maintained our actions in support of society as a means of supporting the fight against COVID-19 and continued with our private social investment strategy with our programs to support children, adolescents, the elderly and entrepreneurs.

At the end of the Brazil Without Hunger Campaign, 200,351 food baskets were donated, 16.6% of which came from resources donated by employees.

We highlight three recognitions in the period:

·         Exame ESG Guide: best ESG bank

·         ECO Amcham Award: case “Santander Effect - Total Force in the Pandemic”

·         GPTW LGBTQI+ Ranking: we were one of the ten companies awarded in the ranking, in partnership with APOLGBT - Association of the LGBT Pride Parade of São Paulo.

9. Effects of the Pandemic - 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 home office work, (b) the definition of a monitoring protocol, with health professionals, for employees and family members who have the symptoms of COVID-19 and (c) increased communication about prevention measures and remote means of care.

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.

10. SX & Open Finance

Our performance, which is based on proximity to the customer and on offering products and services tailored to the needs of each profile, differentiates us in the face of the current transformation of the financial sector. Therefore, we are expanding SX, Santander's special PIX, which totaled R$161.1 billion in PIX sent this quarter, representing a market share of 17% in the same period. In the scope of open finance, we were pioneers in communication with our customers and had a volume of pre-registrations above our expectations.

11. 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 June 30, 2021, 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 semester ended June 30, 2021, 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 07/27/2021)

 

 

 


 

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Balance Sheet

Bank

Consolidated

Notes

06/30/2021

12/31/2020

06/30/2021

12/31/2020

 Current Assets

514,763,562 

586,324,279 

512,612,711 

603,330,917 

  Cash

28,091,844 

19,522,250 

28,111,171 

19,512,315 

  Financial Instruments

430,248,800 

511,695,788 

423,688,555 

523,139,590 

    Interbank Investments

90,122,582 

112,963,929 

39,790,639 

68,116,477 

    Securities and Derivative Financial Instruments

80,389,530 

96,534,510 

91,172,211 

107,235,066 

    Derivative Financial Instruments

16,466,798 

17,886,650 

14,974,809 

18,446,009 

    Lending Operations

108,550,262 

114,776,536 

137,668,990 

141,271,392 

    Others Assets Instruments

134,719,628 

169,534,163 

140,081,906 

188,070,646 

  Leasing Operations 

1,069,868 

905,502 

  Provisions for Expected Losses Associated with Credit Risk

8.e

(6,060,619)

(7,078,539)

(7,650,091)

(8,563,593)

  Other Assets

11 

62,483,537 

62,184,780 

67,393,208 

68,337,103 

Long-Term Assets

433,024,882 

403,900,472 

428,299,302 

399,058,061 

Financial Instruments

362,511,974 

331,190,945 

374,044,162 

340,476,305 

      Interbank Investments

32,665,913 

30,940,159 

3,125,879 

1,581,776 

      Securities and Derivative Financial Instruments

119,736,947 

119,283,560 

127,402,382 

126,013,272 

      Derivative Financial Instruments

13,831,266 

14,394,066 

13,875,643 

14,394,066 

      Lending Operations

192,243,420 

164,803,732 

225,605,911 

196,839,325 

      Others Assets Instruments

4,034,347 

1,769,428 

4,034,347 

1,647,866 

Leasing Operations 

1,385,353 

1,565,882 

Provisions for Expected Losses Associated with Credit Risk

8.e

(16,537,202)

(14,756,906)

(18,351,922)

(16,503,895)

Other Assets

11 

16,845,489 

16,309,573 

20,017,519 

19,747,782 

Current and deferred tax assets

10 

34,863,823 

35,748,981 

39,224,471 

39,920,834 

Investments

24,629,508 

23,208,562 

398,237 

332,851 

Investments:
      Investments in Associates and Subsidiaries

13 

24,608,580 

23,187,617 

377,255 

311,852 

     Other Investments 

20,928 

20,945 

20,982 

20,999 

Fixed Assets

14 

5,870,506 

6,102,538 

6,191,511 

7,046,685 

Real Estate for Use

 

2,450,519 

2,443,916 

2,751,498 

2,744,391 

Other Fixed Assets in Use

 

12,659,345 

12,405,737 

12,836,593 

14,220,916 

(Accumulated Depreciation)

 

(9,239,358) 

(8,747,115) 

(9,396,580) 

(9,918,622) 

Intangible

15 

4,840,783 

6,096,779 

5,389,971 

6,471,617 

Goodwill on Acquisition of Subsidiaries

 

27,236,896 

28,523,504 

27,886,642 

29,680,240 

Other Intangible Assets

 

9,811,735 

9,510,686 

10,095,887 

10,208,203 

(Accumulated Amortizations)

 

(32,207,848) 

(31,937,411) 

(32,592,558) 

(33,416,826) 

Total Assets

947,788,444 

990,224,751 

940,912,013 

1,002,388,978 

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


 


 

 

 

Bank

Consolidated

Notes

06/30/2021

12/31/2020

06/30/2021

12/31/2020

Current Liabilities

602,491,674 

642,103,558 

609,147,876 

657,760,203 

Deposits and Other Financial Instruments

570,472,075 

612,837,974 

561,473,571 

566,373,198 

     Deposits

                16 

301,972,406 

292,520,822 

297,186,903 

290,741,035 

     Local Borrowings

                16 

105,791,613 

119,188,451 

101,812,663 

114,214,008 

Money Market Funding

16 

65,993,517 

53,750,603 

65,993,517 

53,790,402 

     Domestic Onlendings - Official Institutions

                16 

4,389,585 

4,920,596 

9,284,588 

4,920,596 

     Funds from Acceptance and Issuance of Securities 

                16 

28,019,196 

36,043,882 

24,846,931 

30,549,046 

     Derivative Financial Instruments

                  

15,488,484 

17,389,567 

13,848,235 

18,372,819 

     Other Financial Liabilities

17.a

48,817,274 

89,024,053 

53,395,737 

91,955,496 

Other Liabilities

                18 

27,327,367 

26,145,866 

34,863,670 

48,710,732 

Provision for Tax Risks and Legal Obligations

19.b

33,709 

33,573 

118,243 

115,852 

Provision for Judicial and Administrative Proceedings –

Labor and Civil Lawsuits

19.b

2,265,028 

2,343,001 

2,364,780 

2,457,423 

Other Provisions

18 

1,719,937 

1,348,726 

5,959,637 

5,365,387 

Others

18 

23,308,693 

18,683,091 

26,421,009 

34,619,094 

Current and Deferred Tax Liabilities

                10 

4,692,232 

3,119,718 

5,810,635 

4,506,069 

 

 

 

 

 

 

Long-Term Liabilities

265,579,030 

268,624,333 

258,028,420 

251,064,721 

Deposits and Other Financial Instruments

229,996,608 

232,775,324 

216,872,902 

211,859,598 

    Deposits

16 

99,457,786 

99,950,659 

101,400,684 

99,310,763 

    Money Market Funding

16 

21,635,135 

40,783,009 

21,635,135 

40,783,009 

     Local Borrowings

16 

1,673,704 

1,221,159 

1,673,704 

1,221,159 

    Domestic Onlendings - Official Institutions

16 

7,479,913 

7,827,793 

7,479,913 

7,827,793 

    Funds from Acceptance and Issuance of Securities

16 

68,229,615 

51,015,924 

51,411,182 

40,078,721 

    Derivative Financial Instruments

16,350,495 

17,737,559 

16,350,495 

17,896,646 

    Other Financial Liabilities

17.a

15,169,960 

14,239,221 

16,921,789 

15,400,664 

Other Liabilities

32,659,302 

33,579,893 

37,568,188 

38,833,292 

Provision for Tax Risks and Legal Obligations

19.b

4.159.784 

4.216.171 

6.542.289 

6.591.441 

Provision for Judicial and Administrative Proceedings –

Labor and Civil Lawsuits

19.b

2.999.987 

3.578.881 

3.220.123 

3.884.857 

Other Provisions

18 

697.358 

811.461 

775.486 

896.819 

Others

18 

24.802.173 

24.973.380 

27.030.291 

27.460.175 

Current and Deferred Tax Liabilities

10.b

2,923,120 

2,269,116 

3,587,330 

2,802,311 

Deferred Income

378,872 

313,983 

414,185 

355,526 

Stockholders' Equity

20 

79,338,868 

79,182,877 

79,024,369 

78,968,183 

    Capital

20.a

55,000,000 

57,000,000 

55,000,000 

57,000,000 

    Capital Reserves                                                                            20.c

273,136 

302,665 

265,784 

298,313 

    Profit Reserves                                                                              20.c

26,696,430 

23,128,797 

25,995,261 

22,511,135 

Adjustment to Fair Value                  

(1,920,928) 

(457,227) 

(1,526,906) 

(49,907) 

    (-) Treasury Shares                                                                        20.d

(709,770) 

(791,358) 

(709,770) 

(791,358) 

 

 

 

 

Non Controlling Interest

20.e

1,297,163 

1,150,708 

 

 

 

 

Total Stockholders' Equity

79,338,868 

79,182,877 

80,321,532 

80,118,891 

Total Liabilities

947,788,444 

990,224,751 

940,912,013 

1,002,388,978 

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



 

Statement of Income

Bank

Consolidated

Notes

01/01 to 06/30/2021

01/01 to 06/30/2020

01/01 to 06/30/2021

01/01 to 06/30/2020

Income Related to Financial Operations 

25,092,779  

73,967,441 

30,253,142 

79,563,473 

Loan Operations

20,057,178 

28,009,033 

25,417,072 

34,491,929 

Leasing Operations

114,234 

156,260 

Securities Transactions

6.a.V

3,014,908 

50,573,998 

1,780,397 

49,202,392 

Derivatives Transactions

2,292,845 

518,129 

3,210,944 

711,669 

Foreign Exchange Operations

(964,628) 

(6,145,592) 

(964,628) 

(6,017,339) 

Compulsory Deposits

692,476 

1,011,873 

695,123 

1,018,562 

Expenses on Financial Operations 

(6,872,745)

(77,610,921)

(8,898,749)

(79,909,105)

Funding Operations Market

16.b

(4,208,818) 

(40,619,135) 

(5,108,163) 

(41,193,858) 

Borrowings and Onlendings Operations

3,169,053 

(27,328,721) 

3,169,830 

(27,347,015) 

Operations of Sale or Transfer of Financial Assets

103,754 

(1,005,682) 

103,761 

(1,005,631) 

Allowance for Loan Losses 

8.e

(5,936,734) 

(8,657,383) 

(7,064,177) 

(10,362,601) 

Gross Income Related to Financial Operations

18,220,034 

(3,643,480)

21,354,393 

(345,632)

Other Operating Revenues (Expenses)

(5,581,545)

(3,782,437)

(7,528,126)

(6,120,713)

Banking Service Fees

22 

5,138,652 

4,494,803 

6,860,257 

6,127,134 

Income Related to Bank Charges 

22 

2,342,439 

2,162,490 

2,691,467 

2,457,211 

Personnel Expenses 

23 

(2,973,558) 

(3,142,349) 

(3,485,775) 

(3,621,626) 

Other Administrative Expenses 

24 

(6,715,375) 

(5,279,853) 

(7,045,077) 

(6,133,482) 

Tax Expenses 

10.d

(1,891,715) 

(719,006) 

(2,436,627) 

(1,294,924) 

Investments in Affiliates and Subsidiaries

13 

1,959,333 

1,822,223 

28,566 

9,548 

Other Operating Revenues 

25 

1,503,845 

2,333,231 

2,657,802 

3,178,973 

Other Operating Expenses

26 

(4,945,166) 

(5,453,976) 

(6,798,739) 

(6,843,547) 

Operating Income

12,638,489 

(7,425,917)

13,826,267 

(6,466,345)

 

 

 

 

Non-Operating Income 

27 

52,584 

230,830 

28,077 

236,583 

Income Before Taxes on Income and Profit Sharing

12,691,073 

(7,195,087)

13,854,344 

(6,229,762)

Income Tax and Social Contribution 

10.c

(4,737,863)

14,018,215 

(5,926,879)

13,065,872 

Provision for Income Tax

(2,634,890) 

(373,844) 

(3,499,625) 

(1,126,484) 

Provision for Social Contribution Tax 

(2,181,006) 

(327,040) 

(2,626,205) 

(744,220) 

Deferred Tax Credits

78,033 

14,719,099 

198,951 

14,936,576 

Profit Sharing

(858,133)

(880,250)

(940,467)

(963,508)

Non Controlling Interest 

20.e

(67,918) 

(73,040) 

Net Income

7,095,077 

5,942,878 

6,919,080 

5,799,562 

Number of Shares (Thousands)

20.a

7,498,531 

7,498,531 

$)

946,20 

792,54 

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


 


 

Statement of Comprehensive Income

 

Bank

Consolidated

01/01 to 06/30/2021

01/01 to

06/30/2020

01/01 to 06/30/2021

01/01 to

06/30/2020

Profit for the Semester

           7,095,077 

           5,942,878 

           6,919,080 

           5,799,562 

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

         (1,588,341)

            (797,140)

         (1,601,640)

            (802,253)

Available-for-sale financial assets

         (1,543,168)

            (658,290)

         (1,556,467)

            (663,403)

Available-for-sale financial assets

         (2,394,802)

         (1,536,565)

         (2,413,486)

         (1,541,918)

Income taxes

              851,634 

              878,275 

              857,019 

              878,515 

Cash flow hedges

              (45,173)

            (138,850)

              (45,173)

            (138,850)

Cash flow hedges

            (359,922)

                99,414 

            (359,922)

                99,414 

Income taxes

              314,749 

            (238,264)

              314,749 

            (238,264)

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

              124,641 

              679,503 

              124,641 

              679,503 

Defined Benefits plan

              124,641 

              679,503 

              124,641 

              679,503 

Defined Benefits plan

              264,348 

           1,278,431 

              264,348 

           1,278,431 

Income taxes

            (139,707)

            (598,928)

            (139,707)

            (598,928)

Comprehensive Income for the Semester

           5,631,377 

           5,825,241 

           5,442,081 

           5,676,812 

Attributable to parent company

           5,374,163 

           5,603,772 

Attributable to Minority Shareholders

                67,918 

                73,040 

Total

           5,442,081 

           5,676,812 

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


Statement of Changes in Stockholders' Equity – Bank

Profit Reserves

Adjustment to Fair Value

 

Notes

Capital

Capital Reserves

Legal Reserve

Reserve for Dividend Equalization

Own Position 

Affiliates and Subsidiaries

Others Adjustment to Fair Value

Retained     Earnings

(-) Treasury Shares

Total

Balances as of december 31, 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

                      

 

                   

 

                   

 

                    

                   

                   

       679,503 

                   

                   

          679,503 

Treasury Shares

                      

 

                   

 

                   

 

                    

 

                   

 

                   

                   

                   

      (111,373)

         (111,373)

Emission Costs of Treasury Shares

                      

 

        (16,746)

 

                   

 

                    

 

                   

 

                   

 

                   

 

                   

 

                   

 

           (16,746)

Reservations for Share - Based Payment

 

                      

 

         17,338 

 

                   

 

                    

 

                   

 

                   

 

                   

 

                   

 

                   

 

            17,338 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

 

                      

 

                   

 

                   

 

                    

 

      (830,970)

 

         33,830 

 

                   

 

                   

 

                   

 

         (797,140)

Net Income

                      

 

                   

 

                   

 

                    

 

                   

 

                   

 

                   

 

    5,942,878 

 

                   

 

       5,942,878 

Allocations:

 

 

 

 

 

 

 

 

 

Legal Reserve

20.c

                      

 

                   

 

       297,144 

 

                    

 

                   

 

                   

 

                   

 

      (297,144)

 

                   

 

                      

Interest on Capital

20.b

                      

 

                   

 

                   

 

                    

 

                   

 

                   

 

                   

 

      (890,000)

 

                   

 

         (890,000)

Reserve for Dividend Equalization

20.c

                      

 

                   

 

                   

 

     4,755,734 

 

                   

 

                   

 

                   

 

   (4,755,734)

 

                   

 

                      

Balances as of june 30, 2020

     57,000,000 

 

       197,961 

 

    4,115,208 

 

   13,847,406 

 

    3,089,744 

 

       125,210 

 

   (3,070,838)

 

                   

 

      (792,508)

 

     74,512,183 

Changes in the Semester

                      

 

              592 

 

       297,144 

 

     4,755,734 

 

      (830,970)

 

         33,830 

 

       679,503 

 

                   

 

      (111,373)

 

       4,824,460 

 

 

 

 

 

 

 

 

 

Balances as of december 31, 2020

 

     57,000,000 

 

       302,665 

 

    4,520,871 

 

   18,607,926 

 

    2,596,867 

 

       124,185 

 

   (3,178,279)

 

                   

 

      (791,358)

 

     79,182,877 

Employee Benefit Plans

                      

 

                   

 

                   

 

                    

 

                   

 

                   

 

          124,641 

 

                   

 

 

        124,641 

Treasury Shares

                      

 

                   

 

                   

 

                    

 

                   

 

                   

 

                   

 

                   

 

              81,588

 

          81,588 

Result of Treasury Shares

20.d

                      

 

          40,582 

 

                   

 

                    

 

                   

 

                   

 

                   

 

                   

 

                   

 

          40,582 

Reservations for Share - Based Payment

 

                      

 

         (70,111)

 

                   

 

                    

 

                   

 

                   

 

                   

 

                   

 

                   

 

         (70,111)

Adjustment to Fair Value - Securities and Derivative Financial Instruments

 

                      

 

                   

 

                   

 

                    

 

    (1,221,525)

 

                   

(366,817)

 

                   

 

                   

 

                   

 

    (1,588,341)

Spin-off

20.a

(2,000,000) 

 

                   

 

                   

 

               

(527,444) 

 

                   

 

 ��                 

 

                   

 

                   

 

                   

 

    (2,527,444)

Net Income

                      

 

                   

 

                   

 

                    

 

                   

 

                   

 

                   

 

7,095,077 

 

                   

 

     7,095,077 

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal reserve

20.c

 

 

 

354,754 

 

 

 

 

 

       (354,754)

 

 

                    

Dividends

20.b

 

 

 

 

    (2,800,000)

 

 

 

 

       (200,000)

 

 

    (3,000,000)

Reserve for Dividend Equalization

20.c

 

 

 

 

     6,540,323 

 

 

 

 

    (6,540,323)

 

 

                    

Balances as of june 30, 2021

57,000,000 

 

273 ,136

 

4,875,625 

 

21,82 0,805

 

,375,342

 

(242,632)

 

(3,053,638)

 

(709,770)

 

79,338,868 

Changes in the Semester

(2,000,000)

 

(29,529)

 

354,754 

 

3,212,879 

(1,221,525)

 

(366,817)

 

124,641 

 

81,588 

 

155,991 

 


Statement of Changes in Stockholders' Equity – Consolidated

Profit Reserves

 Adjustment to Fair Value

 

 

 

Notes

Capital

Capital Reserves

Legal Reserve

Reserve for Dividend Equalization

Own Position

Affiliates and Subsidiaries

Others Adjustment to Fair Value

Retained Earnings

(-) Treasury Shares

Stockholders' Equity

Minority Interest

Total Stockholders' Equity

Balances as of december 31, 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

                     

               

                 

                     

                    

                 

          679,503 

                 

                 

         679,503 

                 

            679,503 

Treasury Shares

                     

    (16,746)

                 

                     

                    

                 

                     

                 

    (111,373)

        (128,119)

                 

          (128,119)

Result of Treasury Shares

                     

               

                 

                     

                    

                 

                     

                 

                 

                     

                 

                       

 

Reservations for Share - Based Payment

 

                     

     18,968 

                 

                     

                    

                 

                     

                 

                 

           18,968 

                 

              18,968 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

                     

               

                 

                     

       (836,083)

        33,830 

                     

                 

                 

        (802,253)

                 

          (802,253)

 

Capital Restructuring

                     

               

                 

                     

                    

                 

                     

                 

                 

                     

                 

                       

Net Income

                     

               

                 

                     

                    

                 

                     

   5,799,562 

                 

      5,799,562 

                 

         5,799,562 

Allocations:

Legal Reserve

20.c

                     

               

      297,144 

                     

                    

                 

                     

    (297,144)

                 

                     

                 

                       

Provision of Interest on Capital

20.b

                     

               

                 

                     

                    

                 

                     

    (890,000)

                 

        (890,000)

                 

          (890,000)

Reserve for Dividend Equalization

20.c

                     

               

                 

      4,755,734 

                    

                 

                     

(4,755,734) 

                 

                     

                 

                       

Unrealized Profit

                     

               

                 

        (141,628)

                    

                 

                     

      141,628 

                 

                     

                 

                       

Non Controlling Interest Results

20.e

                     

               

                 

                     

                    

                 

                     

                 

                 

                     

      (73,040)

            (73,040)

Others

                     

               

                 

                     

                    

                 

                     

          1,688 

                 

             1,688 

    (518,976)

          (517,288)

Balances as of june 30, 2020

     57,000,000 

   196,337 

   4,115,209 

    13,782,819 

     3,096,353 

      125,210 

     (3,070,839)

                 

    (792,508)

    74,452,581 

   1,103,345 

       75,555,926 

 

Changes in the Semester

                     

       2,222 

      297,144 

      4,614,106 

       (836,083)

        33,830 

          679,503 

                 

    (111,373)

      4,679,349 

    (592,016)

         4,087,333 

 

 


 

Profit Reserves

Adjustment to Fair Value

 

 

 

Notes

Capital

Capital Reserves

Legal Reserve

Reserve for Dividend Equalization

Own Position 

Affiliates and Subsidiaries

Others Adjustment to Fair Value

Retained Earnings

(-) Treasury Shares

Stockholders' Equity

Minority Interest

Total Stockholders' Equity

Balances as of December 31, 2020

 

57,000,000  

298,313  

4,520,872  

17,990,263  

3,004,187  

124,186  

(3,178,280)

(791,358)

78,968,183  

1,150,708  

80,118,891  

Employee Benefit Plans

124,641 

124,641 

124,641 

 

Treasury Shares

40,582 

81,588 

122,170 

122,170 

Reservations for Share - Based Payment

 

(73,111) 

(73,111) 

(73,111) 

Adjustment to Fair Value - Securities and Derivative Financial Instruments

(1,231,063) 

(370,577) 

(1,601,640) 

(1,601,640) 

 

Spin-off

20.a

(2,000,000) 

(527,444) 

(2,527,444) 

(2,527,444) 

Net Income

6,919,080 

6,919,080 

6,919,080 

Allocations:

 

 

 

 

 

 

 

 

 

 

 

 

Legal Reserve

20.c

345,954 

(345,954) 

Dividends

(2,800,000) 

(200,000) 

(3,000,000) 

(3,000,000) 

Reserve for Dividend Equalization

20.c

5,847,526 

(5,847,526) 

Unrealized Profit

525,600 

(525,600) 

Non Controlling Interest Results

20.e

67,918 

67,918 

Others

92,490 

92,490 

78,537 

171,027 

Balances as of June 30, 2021

55,000,000  

265,784  

4.866.826  

21,128,435  

1,773,124  

(246,391)

(3,053,639)

(709,770)

79,024,369  

1,297,163  

80,321,121  

 

Changes in the Semester

(2,000,000)

(32,529)

345.954  

3,138,172  

(1,231,063)

(370,577)

124,641  

81,588 

56,186  

146,455  

202,641  

 


Statement of Cash Flows

Bank

Consolidated

01/01 to 06/30/2021

01/01 a 06/30/2020

01/01 to 06/30/2021

01/01 a 06/30/2020

Notes

Operational Activities

Net Income

7,095,077 

5,942,878 

6,919,080 

5,799,562 

Adjustment to Net Income

57,332,110 

2,662,402 

60,657,215 

6,292,704 

Allowance for Loan Losses 

8.e

5,936,734 

8,657,383 

7,064,177 

10,362,601 

Provision for Legal Proceedings and Administrative and Legal Obligations

19.c

682,691 

693,936 

748,235 

788,593 

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

19.c

256,714 

198,219 

281,504 

229,162 

Deferred Tax Credits and Liabilities

10 

444,203 

(13,232,363) 

441,755 

(13,391,622) 

Equity in Affiliates and Subsidiaries

13 

(1,959,333) 

(1,822,223) 

(28,566) 

(9,548) 

Depreciation and Amortization 

24 

2,289,078 

1,257,520 

2,413,988 

1,512,014 

Recognition (Reversal) Allowance for Other Assets Losses 

27 

18,008 

(10,660) 

12,901 

(20,408) 

Gain (Loss) on Sale of Other Assets 

27 

(48,891) 

(30,607) 

(45,565) 

(21,150) 

Gain (Loss) on Sale of Investments 

27 

(168,588) 

59 

(168,588) 

Provision for Financial Guarantees

18.a

68,864 

22,140 

68,864 

22,140 

Monetary Adjustment of Escrow Deposits

25 

(89,156) 

(194,100) 

(106,148) 

(222,440) 

Recoverable Taxes

25 

(147,406) 

(104,250) 

(155,573) 

(121,134) 

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

(5,325) 

2,432 

(5,325) 

2,432 

Effects of Changes in Foreign Exchange Rates on Assets and Liabilities

49,872,057 

7,437,463 

49,872,057 

7,437,463 

Others

13,872 

(43,900) 

94,852 

(106,811) 

Changes on Assets and Liabilities

(59,342,287)

21,026,605 

(59,265,674)

29,549,008 

Decrease (Increase) in Interbank Investments

24,164,722 

(15,026,083) 

29,564,925 

(686,774) 

Decrease (Increase) in Securities and Derivative Financial Instruments

11,899,979 

(35,949,907) 

9,409,958 

(37,638,082) 

Decrease (Increase) in Lending and Leasing Operations

(26,398,275) 

(44,489,416) 

(31,086,826) 

(45,910,563) 

Decrease (Increase) in Deposits on Central Bank of Brazil

(2,639,646) 

12,237,319 

(2,665,608) 

12,531,685 

Decrease (Increase) in Other Receivables

45,267,855 

(50,393,080) 

44,496,192 

(48,195,538) 

Decrease (Increase) in Other Assets

(261,970) 

(279,893) 

(155,289) 

(253,431) 

Net Change on Other Interbank and Interbranch Accounts

(5,206,070) 

(3,253,311) 

9,700,910 

(2,027,289) 

Increase (Decrease) in Deposits

8,958,711 

87,045,960 

8,535,789 

85,133,317 

Increase (Decrease) in Money Market Funding

(32,544,712) 

1,254,931 

(31,549,219) 

979,231 

Increase (Decrease) in Borrowings 

7,324,629 

7,057,076 

7,284,829 

6,569,259 

Increase (Decrease) in Other Liabilities

(88,850,958) 

62,854,894 

(100,328,415) 

60,036,725 

Increase (Decrease) in Change in Deferred Income

64,889 

(31,885) 

58,659 

190,666 

Income Tax Recovered/(Paid)

(1,121,441) 

(2,531,079) 

(1,180,198) 

Net Cash Provided by (Used in) Operational Activities

5,084,900 

29,631,885 

8,310,621 

41,641,274 

Investing Activities

Increase in Equity at Affiliates and Subsidiaries

13 

(385,100) 

(6,000) 

Investment Acquisition

(130) 

(130) 

Acquisition of Fixed Assets

(374,469) 

(506,672) 

(387,139) 

(596,703) 

Intangible Applications

936,500 

(474,226) 

723,373 

(804,719) 

Net Cash Received on Disposal of Investments

266,100 

171,220 

Acquisition of Residual Minority Interest in Subsidiary

(600,000) 

(1,600,000) 

(18,664) 

(1,600,000) 

Disposal of Non-Financial Assets Held for Sale

343,668 

255,038 

354,469 

270,325 

Disposal of Fixed Assets

23,634 

56,190 

573,482 

60,114 

Disposal of Interests in Affiliates and Subsidiaries

 

876,065 

 

 

 

Dividends and Interest on Equity Received

289,524 

39,612 

152,761 

Net Cash Provided by (Used in) Investing Activities

1,205,398 

(2,099,276)

1,285,133 

(2,353,132)

Financing Activities

Purchase of Own Share

20 

81,588 

(111,373) 

81,588 

(111,373) 

Issuance of Long - Term Emissions 

56,264,246 

46,892,014 

53,546,544 

36,662,956 

Long - Term Payments

(46,964,881) 

(49,038,353) 

(47,732,251) 

(49,038,353) 

Payments of Eligible Debt Instruments to Capital

(436,407) 

(436,407) 

Dividends and Interest on Capital Paid

(4,057,853) 

(8,360,113) 

(4,115,414) 

(8,425,919) 

Increase (decrease) in Minority Interest

5,323,100 

(11,054,232)

1,780,467 

(21,349,096)

Net Cash Provided by (Used in) Financing Activities

5,325 

(2,432)

5,325 

(2,432)

Exchange Variation on Cash and Cash Equivalents

11,618,723 

16,475,945 

11,381,546 

17,936,614 

Increase (Decrease) in Cash and Cash Equivalents

29,191,171 

21,421,432 

28,999,315 

21,443,663 

Cash and Cash Equivalents at the Beginning of Semester

40,809,894 

37,897,377 

40,380,861 

39,380,277 

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


Statement of Value Added

Bank

Consolidated

01/01 to 06/30/2021

01/01 to 06/30/2020

01/01 to 06/30/2021

01/01 to 06/30/2020

Notes

Income Related to Financial Operations 

25,092,779 

      73,967,441 

30,253,142 

      79,563,473 

Income Related to Bank Charges and Banking Service Fees

22 

7,481,091 

        6,657,293 

9,551,724 

        8,584,345 

Allowance for Loans Losses

8.e

(5,936,734) 

       (8,657,383)

(7,064,177) 

     (10,362,601)

Other Revenues and Expenses

(3,388,737) 

      11,127,747 

(4,112,860) 

      10,741,886 

Financial Expenses

(841,324) 

     (68,953,538)

(1,678,175) 

     (69,546,504)

Third-party Input

(4,031,153) 

       (3,627,068)

(4,232,884) 

       (4,217,331)

Materials, Energy and Others

(129,235) 

          (139,471)

(137,879) 

          (146,489)

Third-Party Services

24 

(1,071,342) 

          (883,218)

(1,268,193) 

       (1,171,919)

Others

(2,830,576) 

       (2,604,379)

(2,826,812) 

       (2,898,923)

Gross Added Value

18,375,922  

      10,514,492 

22,716,770  

      14,763,268 

Retentions

Depreciation and Amortization

24 

(2,289,078) 

       (1,257,520)

(2,413,988) 

       (1,512,014)

Added Value Produced Net

16,086,844  

        9,256,972 

20,302,782  

      13,251,254 

Added Value Received from Transfer Investments in Affiliates and Subsidiaries

13 

1,959,333 

        1,822,223 

28,566 

               9,548 

Added Value to Distribute

18,046,177  

      11,079,195 

20,331,348  

      13,260,802 

Added Value Distribution

Employee

3,446,718 

19.1% 

        3,614,803 

32.6% 

3,978,470 

0.0% 

        4,105,649 

31.0% 

Compensation

23 

1,699,140 

 

        1,826,713 

1,958,920 

        2,066,652 

Benefits

23 

594,143 

 

           631,309 

706,617 

           724,363 

Government Severance Indemnity Funds for Employees - FGTS

162,531 

 

           144.814 

192,968 

 

           175,481 

Others

990.904 

 

        1,011,967 

1,119,965 

        1,139,153 

Taxes and Contributions

7,109,238 

39.4% 

        1,126,249 

10.2% 

8,967,675 

0.0% 

        2,859,499 

21.6% 

Federal

6,754,897 

 

           798,860 

8,521,200 

        2,449,589 

State

336 

 

                  166 

376 

                  235 

Municipal

354,005 

 

           327,223 

446,099 

           409,675 

Compensation of Third-Party Capital - Rental

24 

395,144 

2.2% 

           395,265 

3.6% 

398,205 

0.0% 

           404,137 

3.0% 

Remuneration of Interest on Capital

 

7,095,077 

39.3% 

        5,942,878 

53.6% 

6,986,998 

0.0% 

        5,891,517 

44.4% 

Dividends

20.b

3,000,000 

 

 

 

 

 

 

3,000,000 

 

 

 

 

 

Interest on Equity

20.b

 

           890,000 

           890,000 

Profit Reinvestment

 

4,095,077 

 

        5,052,878 

4,054,916 

        5,074,557 

Participation Results of Non-Controlling Stockholders

20.e

 

                       

(67,918) 

            (73,040)

Total

18,046,177  

100.0% 

      11,079,195 

100.0% 

20,331,348  

 

0.0% 

      13,260,802 

100.0% 

 

 


1.     General Information

Or Banco Santander (Brasil) SA (Banco Santander or Banco), directly and indirectly controlled by Banco Santander, SA, headquartered in Spain (Banco Santander Spain), and leading institution of two Financial and Prudential Conglomerates (Santander Conglomerate) or Central Bank do Brasil (Bacen), incorporated as a joint stock company, headquartered at Avenida Presidente Juscelino Kubitschek, 2041, Cj. 281, Block A, Cond. Wtorre JK - Vila Nova Conceição - São Paulo - SP. Banco Santander acts as a multiple-service bank and develops its operations through commercial, investment, credit, financing and investment, real estate credit, leasing and foreign exchange operations. Through controlled companies, there are also markets for payment institution, consortium management, mobile securities brokerage, insurance brokerage, consumer finance, digital platforms, benefits management, management and recovery of non-performing loans, capitalization and bonds private., And provision and administration of food stamps, meals and others. How operations are conducted in the context of a group of institutions that fully serve the financial market. The benefits and costs corresponding to the services provided are absorbed between them and are realized in the normal course of two businesses and under switching conditions.

2.     Presentation of Financial Statements

The individual and consolidated financial statements of Banco Santander, which include its branches abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, together with the norms of the National Monetary Council (CMN), Bacen and the document model provided for in the Accounting Plan of National Financial System Institutions (COSIF), of the Brazilian Securities Commission (CVM), in which they do not conflict with the norms issued by Bacen and show evidence all relevant information specific to the financial statements, which are consistent with those used by Management in its management.

CMN Resolution No. 4,818/2020 and BCB Resolution No. 2/2020 establish the general criteria and procedures for preparing and disclosing the Financial Statements. BCB Resolution No. 2/2020, revoked Bacen Circular No. 3,959/2019, and entered into force as of January 1, 2021, being applicable in the preparation, disclosure and remittance of Financial Statements. Said standard, among other requirements, determined the separate disclosure in an explanatory note of recurring and non-recurring results.

On May 27, 2021, CMN Resolution No. 4,911 was published, which will become effective on January 1, 2022 and propose changes to the documents and disclosures to be made. The Bank is in the process of evaluating and adapting to the Resolution, which determines the extinction of the documents:

·         Trial Balance and Balance Sheet - headquarters and dependence (documents 4020 and 4026);

·         Analytical Balance Sheet - Consolidated Position of Branches and Equity Interests Abroad (document 4343);

·         Balance Sheet and Balance Sheet of the Financial Conglomerate (documents 4040 and 4046);

·         Analytical Balance Sheet - Individual Position of Equity Interest Abroad (document 4313) will be simplified;

·         Prudential Conglomerate Financial Statements with Explanatory Notes / Auditor's Opinion.

The resolution maintains the obligation to publish documents:

·         Analytical Balance Sheet – Prudential Conglomerate, monthly (CADOC 4060);

·         Balance Sheet – Prudential Conglomerate, semiannually (CADOC 4066), for the base dates of June 30 and December 31; and

·         Report on the Prudential Conglomerate, every six months, for the base dates of June 30 and December 31 (which will be further detailed by the regulator).

The preparation of the financial statements requires the adoption of estimates by Management, impacting certain assets and liabilities, disclosures on provisions and contingent liabilities, and revenues and expenses in the periods shown. Since Management's judgment involves estimates regarding the probability of occurrence of future events, the actual amounts may differ from these estimates, the main ones being provision for expected losses associated with credit risk, realization of deferred tax assets, provision for legal proceedings, civil, tax and labor, pension plan and the fair value of financial assets.

The Board of Directors authorized the issue of individual and consolidated financial statements for the semester ended June 30, 2021, at the meeting held on July 27, 2021.

The Condensed Consolidated Interim Financial Statements prepared based on the international accounting standards issued by the International Accounting Standards Board (IASB) for the semester ended June 30, 2021 were simultaneously disclosed on the website www.santander.com.br/ri.

3.     Significant Accounting Policies

a)     Calculation of the result

The accounting method for calculating the result is on an accrual basis and considers income, charges and monetary or exchange variations, calculated at official indices or rates, pro rata day levied on assets and liabilities restated up to the balance sheet date.

b)    Functional Currency

Functional Currency and Presentation Currency

CMN Resolution No. 4,524 of September 29, 2016, with prospective application from January 1, 2017, started to establish accounting procedures for recognition by financial institutions and other institutions authorized to operate by Bacen that hold investments abroad: I - the effects of exchange variations resulting from the conversion of transactions carried out in foreign currency by investees abroad into the respective functional currencies; II - the effects of exchange variations resulting from the conversion of the balances of the financial statements of investees abroad from the respective functional currencies to the national currency; and III - operations with the purpose of hedging the exchange variation of investments abroad. These changes did not impact Banco Santander's financial statements in 2020. The functional currency is the currency of the main economic environment in which the entity operates.

The financial statements are presented in Reais, the functional and presentation currency of Banco Santander and its subsidiaries, including its subsidiary and foreign branches.

The assets and liabilities of the foreign branches and subsidiary are translated into Real as follows:

• Assets and liabilities are translated at the exchange rate on the balance sheet date; and

• Income and expenses are converted at the monthly average exchange rate.

c)     Current and Long-Term Assets and Liabilities

They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis and, when applicable, the effect of adjustments to reduce the cost of assets at their market value (fair value) or realization.

Receivables and payables within 12 months are classified in current assets and liabilities, respectively. Securities classified as trading securities, regardless of their maturity date, are fully classified in current assets, as established by Bacen Circular 3,068/2001.

d)    Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash equivalents correspond to the balances of interbank investments with immediate convertibility, subject to an insignificant risk of change in value and with an original term equal to or less than ninety days.

e)     Interbank investments of liquidity and interest-bearing credits linked to Bacen

They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis.

e.1) Repo Transactions

Sale with Repurchase Agreement

Own fixed-income securities used to back repurchase agreements are highlighted in specific asset accounts (restricted securities) on the transaction date, at the updated average book value, by type and maturity of the security. The difference between the repurchase and sale amounts represents the transaction expense.

The Bank also uses third-party guarantees to raise funds in sales operations with a repurchase agreement, such funding is recorded as a financed position.

Purchase with Resale Commitment

Financing granted based on fixed income securities (from third parties) are recorded in the bank position at the settlement value. The difference between the resale and purchase values ​​represents the transaction income. Securities acquired with resale commitment are transferred to the financed position when used to back sales transactions with repurchase commitment.

Repurchase Transactions carried out with Free Movement Agreement

For operations with a free movement clause, at the time of the definitive sale of the securities acquired with a resale commitment, the liability related to the obligation to return the security must be evaluated at the security's market value.

f) Bonds and Securities

The securities portfolio is demonstrated, in accordance with Circular No. 3.068/2001 of Central Bank, by the following accounting registration and evaluation criteria:

I - trading securities;

II - securities available for sale; and

III - securities held to maturity.

Securities for trading include securities acquired for the purpose of being actively and frequently traded and in the category held-to-maturity securities, those for which there is the Bank's intention and financial capacity to keep them in the portfolio until the Due date. The securities available for sale category includes securities that do not fit into categories I and III. Securities classified in categories I and II are stated at acquisition cost plus income earned up to the balance sheet date, calculated on a daily pro rata basis, adjusted to market value (fair value), computing the appreciation or depreciation arising from such adjustment in return:

(1) the adequate income or expense account, net of tax effects, in the income statement for the period, when related to securities classified in the trading securities category; and

(2) the separate account of shareholders' equity, net of tax effects, when related to securities classified in the category of securities available for sale. Adjustments to market value (fair value) made on the sale of these securities are transferred to profit or loss for the period.

Marketable securities classified in the held-to-maturity category are stated at acquisition cost plus income earned through the balance sheet date, calculated on a daily pro rata basis.

Permanent losses in the realization value of marketable securities classified in the available-for-sale securities and held-to-maturity securities categories are recognized in income for the period.

g) Derivative Financial Instruments

Pursuant to Central Bank Circular No. 3.082/2002, derivative financial instruments are classified according to Management's intention to use them as a hedge instrument or not. Transactions carried out at the request of customers, on their own, or that do not meet the accounting hedge criteria, mainly derivatives used in the management of global risk exposure, are accounted for at market value, with realized and unrealized gains and losses, recognized in the income for the period.

Derivative financial instruments designated as part of a risk protection structure (hedge) can be classified as:

I - market risk hedge; and

II - cash flow hedge.

Derivative financial instruments intended for hedging and the respective hedge objects are adjusted to market value, observing the following:

(1) for those classified in category I, the appreciation or depreciation is recorded against the appropriate income or expense account, net of tax effects, in the income statement for the period; and

(2) for those classified in category II, the valuation or devaluation of the effective portion is recorded as a contra entry to a separate shareholders' equity account, net of tax effects.

Some hybrid financial instruments are composed of a derivative financial instrument and a non-derivative asset or liability. In these cases, the derivative financial instrument represents an embedded derivative. Embedded derivatives are recorded separately in relation to the contract to which they are linked.

We do not have net investment hedge transactions in foreign operations as defined in CMN Resolution No. 4.524/2016.

h) Loan Portfolio and Provision for Expected Losses Associated with Credit Risk

The credit portfolio includes credit operations, leasing operations, advances on exchange contracts and other credits with credit granting characteristics. It is stated at its present value, considering the indices, interest rate and agreed charges, calculated on a daily pro rata basis until the balance sheet date. For operations overdue after 60 days, recognition in revenue will only occur when they are actually received.

Normally, the Bank writes-off credits for loss when they are overdue for more than 360 days. In the case of long-term credit operations (over 3 years) they are written off when they complete 540 days in arrears. The credit operation written off for loss is registered in a memorandum account for a minimum period of 5 years and until all collection procedures have been exhausted.

Credit assignments without risk retention result in the write-off of the financial assets that are the object of the transaction, which are now kept in a memorandum account. The result of the assignment is fully recognized upon its realization.

As of January 2012, as determined by CMN Resolution No. 3,533/2008 and CMN Resolution No. 3,895/2010, all credit assignments with substantial risk retention will have their results recognized for the remaining terms of the operations, and the financial assets objects of the assignment remain recorded as credit operations and the amount received as obligations for sale or transfer of financial assets.

Provisions for credit operations are based on the analysis of outstanding credit operations (overdue and falling due), on past experience, future expectations and specific risks of the portfolios and on the Management's risk assessment policy in the constitution of provisions, as established by the CMN Resolution No. 2682/1999.

CMN Resolution No. 4,855 of September 24, 2020, which entered into force on January 1, 2021, determines that, for the criteria for provision of operations carried out under the programs instituted for the purpose of facing the effects of the pandemic of COVID-19 in the economy, in which there is a sharing of resources or risks between the Federal Government and participating institutions or a guarantee provided by the Federal Government, the percentages defined in Resolution No. 2,682 shall be applied only on the portion of the accounting value of the operation, whose credit risk is held by the institution. In cases of transfer to loss, the amount taken to memorandum accounts must be 100% of the transaction balance.

h.1) Credit Operation Restructuring

CMN Resolution 4,803, later amended by CMN Resolution No. 4,855 mentioned above, allowed Financial Institutions to reclassify to the level at which they were classified on February 29, 2020, operations renegotiated between March 1 and December 31, 2020 (wording given by resolution 4,855), not including those operations with a delay of fifteen days or more on February 29, 2020 and that present evidence of inability to honor the obligation under the new agreed conditions.

i) Non-Current Assets Held for Sale and Other Values ​​and Assets

Non-current assets held for sale include the book value of individual items, disposal groups or items that are part of a business unit destined for disposal (discontinued operations), whose sale in their current condition is highly probable and whose occurrence is expected for within a year.

Other amounts and assets refer mainly to assets not for own use, basically consisting of real estate and vehicles received as payment.

Non-current assets held for sale and assets not for own use are generally recorded at the lower of fair value less cost to sell and book value on the date they are classified in this category and are not depreciated.

j) Prepaid Expenses

Investments of resources in prepayments are accounted for, whose benefits or services will occur in subsequent years and are allocated to income, in accordance with the term of the respective contracts.

j.1) Commissions Paid to Bank Correspondents

Considering what is contained in CMN Resolution No. 4,294 and Bacen Circular No. 3,693 of December 2013, as of January 2015, commissions paid to intermediary agents for the origination of new credit operations are limited to the maximum percentages of (i) 6% of the value of the new originated operation and (ii) 3% of the value of the operation subject to portability.

These fees must be fully recognized as an expense when incurred.

k) Investments

Investments in associated and controlled companies are initially recognized at their acquisition cost, and subsequently valued using the equity method and the results are recognized in the result of interest in affiliates and subsidiaries. Other investments are stated at cost, reduced to recoverable value, when applicable.

Change in the Scope of Consolidation – Consists of the sale, acquisition or change in control of a specific investment.

l) Fixed Assets

It is stated at acquisition cost, net of the respective accumulated depreciation and is subject to the assessment of the recoverable value in annual periods.

Fixed assets are depreciated using the straight-line method, based on the following annual rates: buildings - 4%, facilities, furniture, equipment for use and security and communications systems - 10%, data processing systems and vehicles - 20% and improvements in third-party properties - 10% or until the lease agreement expires.

m) Intangible

Goodwill on the acquisition of subsidiaries and affiliates is amortized within 10 years, subject to the expectation of future results and is subject to the assessment of the recoverable amount in annual periods or more frequently if the conditions or circumstances indicate the possibility of loss of its value.

The rights for the acquisition of payrolls are accounted for by the amounts paid in the acquisition of rights to provide services for the payment of salaries, earnings, salaries, salaries, retirement, pensions and similar, from public or private entities, and amortized in accordance with the duration of the respective contracts.

Software acquisition and development expenses are amortized over a maximum period of 5 years.

n) Technical Provisions Related to Pension and Capitalization Activities

Technical reserves are set up and calculated in accordance with the determinations and criteria established in the regulations of the National Council for Private Insurance (CNSP) and the Superintendence of Private Insurance (SUSEP).

Technical Pension Provisions

Technical provisions are mainly constituted in accordance with the criteria below:

• Mathematical Provisions of Benefits to Be Granted and Granted (PMBaC and PMBC)

PMBaC is constituted from contributions collected through the capitalization financial system. The PMBC represents the obligations assumed in the form of continuing income plans, being constituted through actuarial calculations for the plans of the traditional types.

• Supplementary Coverage Provision (PCC)

The PCC must be created when insufficiency in the technical provisions resulting from the performance of the Liability Adequacy Test (TAP) is observed.

Technical provisions for capitalization

Technical provisions are set up in accordance with the criteria below:

• Mathematical provision for redemption results from the accumulation of applicable percentages on payments made, capitalized with the interest rate provided for in the plan and updated using the Basic Reference Rate (TR);

• Provision for redemption of prepaid securities is constituted from the cancellation due to non-payment or request for redemption of the security, based on the value of the mathematical provision for redemption constituted at the time of cancellation of the security and the provision for redemption of overdue securities is constituted after the end of the term of the title;

• Provision for unrealized drawings is constituted based on a percentage of the installment paid and is intended to cover the drawings in which the titles will compete, but which have not yet been carried out. The provision for raffles payable is set up for the titles drawn, but which have not yet been paid; and

• Provision for administrative expenses is intended to reflect the present value of future expenses on capitalization bonds whose validity extends after their constitution date.

o) Employee Benefit Plan

The post-employment benefit plans comprise the commitments assumed by the Bank to: (i) complement the benefits of the public pension system; and (ii) medical assistance, in the event of retirement, permanent disability or death for those eligible employees and their direct beneficiaries.

Defined Contribution Plan

Defined contribution plan is the post-employment benefit plan whereby the Bank and its subsidiaries, as sponsoring entities, pay fixed contributions to a pension fund during the period of employment of the beneficiary employee, without any legal or constructive obligation to pay additional contributions if the fund does not have sufficient assets to meet all benefits relating to services rendered in the current and prior periods.

Contributions made in this regard are recognized as personnel expenses in the income statement.

Defined Benefit Plans

Defined benefit plan is a post-employment benefit plan that is not a defined contribution plan and are presented in Note 28. For this type of plan, the obligation of the sponsoring entity is to provide the benefits agreed with the employees, assuming the potential actuarial risk that benefits will cost more than estimated.

Since January 2013, Banco Santander has applied the Technical Pronouncement of the Accounting Pronouncements Committee (CPC) 33 (R1), which establishes full recognition in a liability account when unrecognized actuarial losses (actuarial deficit) occur, in contra-entry to the account from equity (other equity valuation adjustments).

Main Definitions

- The present value of a defined benefit obligation is the present value, without deducting any plan assets, from the expected future payments required to settle the obligation resulting from employee service in the current and past periods.

- Deficit or surplus is: (a) the present value of the defined benefit obligation; minus (b) the fair value of plan assets.

- The sponsoring entity may recognize plan assets in the balance sheet when they meet the following characteristics: (i) the fund's assets are sufficient to meet all employee benefit obligations of the plan or sponsoring entity; or (ii) the assets are returned to the sponsoring entity for the purpose of reimbursing it for benefits already paid to employees.

- Actuarial gains and losses are changes in the present value of the defined benefit obligation resulting from: (a) adjustments for experience (effects of differences between the adopted actuarial assumptions and what actually occurred); and (b) effects of changes in actuarial assumptions.

- Current service cost is the increase in the present value of the defined benefit obligation resulting from the service provided by the employee in the current period.

- Past service cost is the change in the present value of the defined benefit obligation for service provided by employees in prior periods, resulting from a change in the plan or a reduction in the number of covered employees.

Post-employment benefits are recognized in income under other operating expenses - actuarial losses - retirement plans (Note 28) and personnel expenses (Note 23).

Defined benefit plans are recorded based on an actuarial study, carried out annually by an external specialized consulting entity and approved by Management, at the end of each year and effective for the subsequent period.

p) Share-Based Compensation

The Bank has long-term compensation plans with conditions for acquisition. The main conditions for acquisition are: (1) conditions of service, as long as the participant remains employed during the term; (2) performance conditions, the number of shares to be delivered to each participant will be determined according to the result of the measurement of a performance parameter of the Bank: comparison of the Total Shareholder Return (RTA) of the Santander Conglomerate with the RTA of the main global competitors of the Group and (3) market conditions, as some parameters are conditioned to the market value of the Bank's shares. The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value.

Settlement in Shares

The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value. In order to recognize personnel expenses against capital reserves over the term, as services are received, the Bank considers the treatment of service conditions and recognizes the amount for services received during the period of term, based on the best assessment of the estimate for the number of equity instruments expected to be granted.

Cash Settlement

For cash-settled share-based payments (in the form of share appreciation), the Bank measures the services provided and the corresponding liability incurred at fair value. This procedure consists of capturing the appreciation of the shares between the grant and settlement date. The Bank reassesses the fair value of the liability at the end of each reporting period, any changes in this amount are recognized in profit or loss for the period. In order to recognize personnel expenses against the provisions in "salaries payable" throughout the term, reflecting how services are received, the Bank records the total liability that represents the best estimate of the amount of valuation right of the shares that will be acquired at the end of the effective period and recognizes the value of services received during the effective period, based on the best available estimate. Periodically, the Bank reviews its estimate of the number of share appreciation rights that will be acquired at the end of the vesting period.

Variable Compensation Referenced to Shares

In addition to the administrators, all employees in a position of risk takers receive at least 40% of their variable remuneration deferred in at least three years and 50% of the total variable remuneration in shares (SANB11), subject to the participant's permanence in the Group throughout the term of the plan.

The plan is subject to the application of Malus and Clawback clauses, according to which deferred portions of variable compensation can be reduced, canceled or returned in cases of non-compliance with internal rules and exposure to excessive risks.

The fair value of the shares is calculated based on the average of the final daily quotation of the shares in the 15 (fifteen) last trading sessions immediately prior to the first business day of the grant month.

q) Funding, Issues and Other Liabilities

Fundraising instruments are initially recognized at their fair value, basically considered as the transaction price. They are subsequently measured at amortized cost (expenses) with the inherent expenses recognized as a financial cost (Note 16).

Among the criteria for initial recognition of liabilities, mention should be made of those instruments of a compound nature, which are classified as such, given the existence of a debt instrument (liabilities) and an embedded equity component (derivatives).

The registration of a compound instrument consists of the combination of (i) a principal instrument, which is recognized as a genuine liability of the entity (debt) and (ii) an equity component (convertibility derivative into common shares).

Pursuant to COSIF, hybrid capital and debt instruments represent obligations of issuing financial institutions and must be recorded in specific liability accounts and updated according to agreed rates and adjusted for the effect of exchange variation, when denominated in currency foreign. All remuneration referring to these instruments, such as interest and exchange variation (difference between the functional currency and the currency in which the instrument was denominated) must be recorded as expenses for the period, on an accrual basis.

Regarding the equity component, it is recorded at the initial moment due to its fair value, if different from zero.

The details pertaining to the issuance of composite instruments are described in Note 18.

r) Provisions, Contingent Liabilities, Contingent Assets and Legal Obligations - Tax and Social Security

Banco Santander and its subsidiaries are parties to legal and administrative proceedings of a tax, labor and civil nature, arising from the normal course of their activities.

Provisions include legal obligations, legal and administrative proceedings related to tax and social security obligations, whose object of challenge is their legality or constitutionality, which, regardless of the assessment of the probability of loss, have their amounts fully recognized in the financial statements.

Provisions are reassessed at the end of each reporting period to reflect the current best estimate and may be fully or partially reversed, reduced or may also be supplemented, when there is a change in risk in relation to the outflows of resources and obligations relevant to the process, including the decay of legal deadlines, the unappealable decision of the processes, among others.

Judicial and administrative provisions are constituted when the risk of loss of the legal or administrative action is assessed as probable and the amounts involved are measurable with sufficient certainty, based on the nature, complexity, and history of the actions and on the opinion of internal legal advisors and external and best available information. For lawsuits whose risk of loss is possible, provisions are not set up and information is disclosed in the explanatory notes (Note 18.h) and for lawsuits whose risk of loss is remote, no disclosure is made.

Contingent assets are not recognized in the accounts, except when there are real guarantees or favorable court decisions, over which there are no further appeals, characterizing the gain as practically certain. Contingent assets with probable success, if any, are only disclosed in the financial statements.

In the case of final and unappealable decisions favorable to Banco Santander, the counterparty has the right, if specific legal requirements are met, to file a rescission action within a period determined by the legislation in force. Termination actions are considered new actions and will be assessed for contingent liability purposes if and when they are filed.

s) Social Integration Program (PIS) and Contribution to Social Security Financing (COFINS)

PIS (0.65%) and COFINS (4.00%) are calculated on the revenue of the activity or main object of the legal entity. Financial institutions are allowed to deduct funding expenses when determining the calculation basis. PIS and COFINS expenses are recorded in tax expenses. For non-financial companies the rates are 1.65% for PIS and 7.6% for COFINS.

t) Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)

The IRPJ charge is calculated at the rate of 15%, plus an additional 10%, applied to the profit, after making the adjustments determined by the tax legislation. CSLL is calculated at the rate of 15% for financial institutions and legal entities of private and capitalization insurance and 9% for other companies, levied on profit, after considering the adjustments determined by tax legislation. The CSLL rate, for banks of any kind, was increased from 15% to 20% effective as of March 1, 2020, pursuant to article 32 of Constitutional Amendment 103, published on November 13, 2019.

Tax credits and deferred liabilities are basically calculated on temporary differences between the accounting and tax results, on tax losses, negative basis of social contribution and adjustments to the market value of securities and derivative financial instruments. Deferred tax credits and liabilities are recognized at the rates applicable to the period in which the asset is expected to be realized and/or the liability settled.

Pursuant to current regulations, tax credits are recorded to the extent that their recovery is considered probable based on the generation of future taxable income. The expected realization of tax credits, as shown in Note 10, is based on projections of future results and based on a technical study.

u) Interest on Equity

Published on December 19, 2018, effective as of January 1, 2019, CMN Resolution No. 4,706 is prospectively applicable and determines procedures for the accounting record of capital remuneration. The Standard determines that Interest on Equity must be recognized from the moment they are declared or proposed and thus constitute an obligation present on the balance sheet date and, in compliance with this determination, this capital remuneration must be recorded in a specific account in Shareholders' Equity.

v) Reduction to the Recoverable Amount of Assets

Financial and non-financial assets are evaluated at the end of each period, in order to identify evidence of impairment of their book value. If there is any indication, the entity shall estimate the recoverable amount of the asset and such loss shall be recognized immediately in the income statement. The recoverable amount of an asset is defined as the greater of its fair value, net, of selling expenses and its value in use.

w) Payments and Advances based on Results

CMN Resolution No. 4,797 was revoked and replaced by CMN Resolution No. 4,820, which was amended by CMN Resolution No.

4.885, which came into effect on December 23, 2020, and with them, it was determined that financial institutions and others institutions

authorized to operate by the Central Bank of Brazil are prohibited from:

 

(i) remunerate equity, including in the form of advance, above the following amounts:

(a) the amount equivalent to 30% (thirty percent) of the net income adjusted pursuant to item I of art. 202 of Law No. 6.404, of December 15, 1976; and amount equivalent to the minimum distribution of profit established in the articles of association in the case of institutions incorporated as limited liability companies;

(b) the equivalent amount.

1. to the minimum mandatory dividend, established by art. 202 of Law No. 6.404 of 1976, including in the form of interest on equity, in the case of institutions incorporated as a corporation; or

2. the minimum distribution of profit 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 organized over-the-counter market, up to a limit of 5% (five percent) of the shares issued, including the shares accounted for in treasury at the entry into force of this Resolution);

(iii) reduce the share capital, except in cases where it is mandatory, pursuant to 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 corporations, and of administrators, in the case of limited liability companies;

Any anticipation of the amounts mentioned in items “a” and “b” of item I must be carried out in a conservative, consistent and compatible manner with the uncertainties of the current economic situation.

 

The amounts subject to the aforementioned prohibitions cannot be subject to future disbursement obligations, and these prohibitions apply from the date of publication of CMN Resolution No. 4,797 (on April 6, 2020) to December 31, 2020 and must be observed regardless of the maintenance of resources in an amount greater than the Additional Principal Capital (ACP), referred to in CMN Resolutions No. 4,193, of March 1, 2013, and 4,783, of March 16, 2020.

x) Results of Future Years

Refers to the income received before the fulfillment of the obligation period to which they originated, including non-refundable income, mainly related to guarantees and sureties provided and credit card annuities. The appropriation to the result is made in accordance with the term of the respective contracts.

y) Minority Shareholder Participation

The participation of non-controlling (minority) shareholders is recorded in a separate equity account of the controlling entity in the consolidated financial statements.

z) Financial Guarantees Provided

CMN Resolution No. 4,512 of July 28, 2016 and Bacen Circular Letter No. 3,782 of September 19, 2016 established accounting procedures to be applied, determining the constitution of a provision to cover losses associated with financial guarantees provided under any prospectively as of January 1, 2017. Losses associated with the probability of future disbursements linked to financial guarantees provided are evaluated in accordance with recognized credit risk management models and practices and based on consistent, reasonable information and criteria of verification. The provision must be sufficient to cover probable losses throughout the term of the guarantee provided and are periodically evaluated.

aa) Recurring/Non-recurring Results

BCB Resolution No. 2, of November 27, 2020, in its article 34, started to determine the segregation of recurring and non-recurring results. Therefore, a non-current result of the exercise is defined as that which: I - is not related or is incidentally related to the institution's typical activities; and II - is not expected to occur frequently in future fiscal years.

The nature and financial effect of events considered non-recurring are shown in Note 30.

ab) Non-financial assets held for sale

As of January 1, 2021, CMN Resolutions no. 4,747 and 4,748 of August 2019 and BACEN Circular Letter No. 3,994, which establish criteria for recognition and measurement of non-financial assets held for sale by Financial Institutions.

CMN Resolution No. 4,747, among other requirements, establishes that depending on the origin of non-financial assets held for sale, financial institutions must classify them as:

a) own;

b) received in the settlement of a difficult or doubtful financial instrument as a form of payment of doubtful financial instruments not intended for its own use.

CMN Resolution No. 4,748, establishes that financial institutions and other institutions authorized to operate by the Central Bank of Brazil must comply with Technical Pronouncement CPC 46 - Fair Value Measurement (CPC46) in the measurement of equity and income elements, in situations in which the measurement at fair value of such elements is provided for in specific regulations.

ac) Current and Deferred Tax Assets and Liabilities

CMN Resolution No. 4,842, of July 30, 2020 consolidated the general criteria for measurement and recognition of current and deferred tax assets and liabilities by financial institutions and other institutions authorized to operate by the Central Bank of Brazil and BCB Resolution No. 15 , of september 17, 2020 (revoked BACEN Circulars No. 3.776/2015 and No. 3.174/2003), consolidated the procedures to be observed by institutions authorized to operate by the Central Bank of Brazil in the constitution or write-off of deferred tax assets and in the disclosure information on deferred tax assets or liabilities in the explanatory notes.

ad) Subsequent Events

Corresponds to the event that occurred between the base date of the financial statements and the date on which the issuance of these statements was authorized and comprises:

• Events that give rise to adjustments: are those that evidence conditions that already existed on the base date of the financial statements; and

• Events that do not give rise to adjustments: are those that show conditions that did not exist on the base date of the financial statements.

4.     Cash and Cash Equivalents

 

Bank

06/30/2021

12/31/2020

06/30/2020

12/31/2019

Cash

            28,091,844 

19,522,250 

20,790,248  

9,543,649 

Interbank Investments

            12,718,051 

9,668,922 

17,107,129  

11,877,783 

Money Market Investments

              5,163,132 

7,348,568 

12,744,453 

110,746 

Interbank Deposits

                 1,128,431 

1,131,436 

1,062,210 

1,465,065 

Foreign Currency Investments

              6,426,487 

1,188,917 

8,967,936 

10,301,972 

Total

            40,809,894 

29,191,171 

3,300,466  

21,421,432 

 

 

Consolidated

06/30/2021

12/31/2020

30/06/2020

12/31/2019

Cash

            28,111,171 

19,512,315 

22,654,686  

9,924,644 

Interbank Investments

            12,269,690 

9,487,000 

16,725,591  

11,519,019 

Money Market Investments

              5,163,132 

7,306,408 

12,744,453 

110,746 

Interbank Deposits

              680,071 

991,675 

679,822 

1,105,446 

Foreign Currency Investments

              6,426,487 

1,188,917 

3,301,316 

10,302,827 

Total

            40,380,861 

28,999,315 

39,380,277  

21,443,663 

 

 

 

 

 

 

5.     Interbank Investments

Bank

06/30/2021

12/31/2020

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Money Market Investments

  30,606,72

     30,606,722 

62,644,146 

Own Portfolio

     1,859,650 

        1,859,650 

12,833,464 

Financial Treasury Bills - LFT

          83,040 

             83,040 

2,869,850 

National Treasury Bills - LTN

        301,258 

           301,258 

2,218,460 

National Treasury Notes - NTN

     1,475,352 

        1,475,351 

7,745,154 

Third-party Portfolio

     6,098,716 

        6,098,716 

6,203,774 

National Treasury Bills - LTN

      902,515 

          902,515 

National Treasury Notes - NTN

        5,046,039 

           5,046,039 

Financial Treasury Bills - LFT

 

150,162 

 

 

 

150,161 

 

6,203,774 

Sold Position

 22,648,357 

       22,648,357 

43,606,908 

National Treasury Bills - LTN

  2,834,909 

        2,834,909 

1,498,684 

National Treasury Notes - NTN

    19,199,583 

      19,100,583 

8,469,234 

Financial Treasury Bills - LFT

   712,865 

           712,865 

33,638,990 

Interbank Deposits

        8,879,811 

44,209,562 

   32,665,913

      85,755,286 

80,071,025 

Foreign Currency Investments

     6,426,487 

                    -

        6,426,487 

1,188,917 

Total

     45,913,020 

44,209,562 

   32,665,913

        122,788,495 

143,904,088 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

06/30/2021

12/31/2020

Up to 3 Months

From 3 to 12 Months

Over 12 Months

Total

Total

Money Market Investments

  30,606,722 

              18,947 

                    

      30,625,670 

62,601,986 

Own Portfolio

     1,859,649 

                  18,947 

                    

        1,878,597 

12,833,464 

Financial Treasury Bills - LFT

          83,040 

                             

                    

             83,040 

2,869,850 

National Treasury Bills - LTN

        301,258 

                  18,947 

                    

           320,206 

2,218,460 

National Treasury Notes - NTN

     1,475,351 

                             

                    

        1,475,351 

7,745,154 

Third-party Portfolio

     6,098,716 

                - 

                    

        6,098,716 

6,203,774 

National Treasury Bills - LTN

        902,515 

           902,515 

National Treasury Notes - NTN

     5,046,039 

- 

                    

          5,046,039 

Financial Treasury Bills - LFT

 

    150,161

 

                    

 

                    

 

          150,161 

 

6,203,774 

Sold Position

   22,648,357 

                             

                    

        22,648,357 

43,564,748 

Financial Treasury Bills - LFT

     2,834,909 

                             

                    

     2,834,909 

1,456,524 

National Treasury Bills - LTN

   19,100,583 

                             

                    

   19,100,583 

8,469,234 

National Treasury Notes - NTN

        712,865 

                             

                    

        712,865 

33,638,990 

Interbank Deposits

     1,164,421 

              1,574,060 

     3,125,879 

          5,864,360 

5,907,350 

Foreign Currency Investments

     6,426,488 

              -  

     -  

        6,426,488 

1,188,917 

Total

     38,197,631 

          1,593,008 

     3,125,879 

       42,916,518 

69,698,253 


6.     Securities and Derivatives Financial Instruments

a)     Securities

I) By Category

 

Bank

Consolidated

06/30/2021

12/31/2020

06/30/2021

12/31/2020

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

      48,099,678 

          (114,535)

                       

      47,985,143 

65,380,859 

      59,337,065 

           183,680 

                       

      59,520,745 

75,006,276 

Government Securities

      47,332,531 

          (112,428)

                       

      47,220,103 

64,621,598 

      56,061,579 

           156,251 

                       

      56,217,830 

72,038,263 

Private Securities

           767,147 

              (2,107)

                       

           765,040 

759,261 

        3,275,486 

             27,429 

                       

        3,302,915 

2,968,013 

Available-for-Sale Securities

    137,601,882 

                       

           859,027 

    138,460,909 

134,119,306 

    144,777,234 

                       

           596,189 

    145,373,423 

141,924,157 

Government Securities

    101,881,147 

                       

            (65,741)

    101,815,406 

102,157,294 

    110,972,474 

                       

          (334,228)

    110,638,246 

113,549,050 

Private Securities

      35,720,735 

                       

           924,768 

      36,645,503 

31,962,012 

      33,804,760 

                       

           930,417 

      34,735,177 

28,375,108 

Held-to-Maturity Securities

      13,680,425 

                       

                       

      13,680,425 

16,317,905 

      13,680,425 

                       

                       

      13,680,425 

16,317,905 

Government Securities

      12,425,787 

                       

                       

      12,425,787 

14,739,539 

      12,425,787 

                       

                       

      12,425,787 

14,739,539 

Private Securities

        1,254,638 

                       

                       

        1,254,638 

1,578,365 

        1,254,638 

                       

                       

        1,254,638 

1,578,365 

Total Securities

    199,381,985 

          (114,535)

           859,027 

    200,126,477 

215,818,070 

    217,794,724 

           183,680 

           596,189 

    218,574,593 

233,248,338 

 


 

II) Trading Securities

 

Bank

06/30/2021

12/31/2020

By Maturity

06/30/2021

Trading Securities

Amortized Cost

Adjustment to Fair Value - Income

Carrying Amount

Carrying Amount

Without Maturity

Up to 3 Months

From 3 to 12 Months

From 1 to 3 Years

Over 3 Years

Total

Government Securities

                                   47,332,531 

               (112,428)

           47,220,103 

64,621,598 

                     

      1,998,976 

    3,947,703 

    12,048,937 

    29,224,487 

     47,220,103 

Financial Treasury Bills - LFT

                                     2,873,524 

                       362 

             2,873,886 

2,208,130 

                     

         559,070 

       623,521 

         896,242 

         795,053 

       2,873,886 

National Treasury Bills - LTN

                                   11,268,226 

                 (19,538)

           11,248,688 

23,439,521 

                     

         390,430 

    3,147,175 

      5,196,991 

      2,514,092 

     11,248,688 

National Treasury Notes - NTN

                                   32,492,692 

                 (94,145)

           32,398,547 

38,186,441 

                     

         394,925 

       169,306 

      5,940,700 

    25,893,616 

     32,398,547 

Agricultural Debt Securities - TDA

                                          29,050 

                    1,238 

                  30,288 

44,820 

                     

             2,103 

           7,465 

           15,001 

             5,719 

            30,288 

Brazilian Foreign Debt Notes

                                        652,909 

                          (6)

                652,903 

678,533 

                     

         652,274 

              235 

                    

                391 

          652,903 

Debentures

                                          16,130 

                      (339)

                  15,791 

64,153 

                     

                174 

                  

                     

           15,616 

            15,791 

Private Securities

                                        767,147 

                   (2,107)

                765,040 

759,261 

          317,762 

             6,975 

           3,273 

           49,238 

         387,792 

          765,040 

Investment Fund Shares

                                        315,946 

                    1,816 

                317,762 

369,041 

          317,762 

                     

                   

                     

                     

          317,762 

Debentures

                                        159,532 

                   (3,216)

                156,316 

273,671 

                     

             6,722 

           2,676 

           42,508 

         104,410 

          156,316 

Certificates of Real Estate Receivables - CRI

                                          30,954 

                        (73)

                  30,881 

23,008 

                     

                     

                19 

                290 

           30,572 

            30,881 

Certificates of Agribusiness Receivables - CRA

                                        260,715 

                      (634)

                260,081 

23,866 

                     

                253 

              578 

             6,440 

         252,810 

          260,081 

Financial Bills - LF

                                                    

                            

                            

69,675 

                     

                     

                   

                     

                     

                      

Total

                                   48,099,678 

               (114,535)

           47,985,143 

65,380,859 

          317,762 

      2,005,951 

    3,950,976 

    12,098,175 

    29,612,279 

     47,985,143 

 


 

Consolidated

06/30/2021

12/31/2020

By Maturity

06/30/2021

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

                                   56,061,579 

                156,251 

           56,217,830 

72,038,263 

                     

      2,371,128 

    4,624,847 

    16,984,219 

    32,237,636 

     56,217,830 

Financial Treasury Bills - LFT

                                     9,414,264 

                  17,086 

             9,431,350 

7,316,112 

                     

         931,222 

    1,300,665 

      5,820,573 

      1,378,890 

       9,431,350 

National Treasury Bills - LTN

                                   11,279,624 

                 (19,985)

           11,259,639 

23,450,858 

                     

         390,430 

    3,147,175 

      5,207,942 

      2,514,092 

     11,259,639 

National Treasury Notes - NTN

                                   34,669,603 

                158,256 

           34,827,859 

40,483,786 

                     

         394,925 

       169,306 

      5,940,700 

    28,322,928 

     34,827,859 

Agricultural Debt Securities - TDA

                                          29,050 

                    1,238 

                  30,288 

44,820 

                     

             2,103 

           7,465 

           15,001 

             5,719 

            30,288 

Brazilian Foreign Debt Bonds

                                        652,909 

                          (6)

                652,903 

678,533 

                     

         652,274 

              235 

                    

                391 

          652,903 

Debentures

                                          16,129 

                      (338)

                  15,791 

64,153 

                     

                174 

                  

                     

           15,616 

            15,791 

Private Securities

                                     3,275,486 

                  27,429 

             3,302,915 

2,968,013 

       2,009,101 

             6,975 

       136,878 

           49,238 

      1,100,723 

       3,302,915 

Shares

                                     1,643,713 

                    8,280 

             1,651,993 

1,339,892 

       1,651,993 

                     

                   

                     

                     

       1,651,993 

Investment Fund Shares

                                        355,292 

                    1,816 

                357,108 

401,442 

          357,108 

                     

                   

                     

                     

          357,108 

Debentures

                                        851,207 

                  18,040 

                869,247 

1,077,513 

                     

             6,722 

           2,676 

           42,508 

         817,341 

          869,247 

Certificates of Real Estate Receivables - CRI

                                          30,954 

                        (73)

                  30,881 

23,008 

                     

                     

                19 

                290 

           30,572 

            30,881 

Certificates of Agribusiness Receivables - CRA

                                        260,715 

                      (634)

                260,081 

23,866 

                     

                253 

              578 

             6,440 

         252,810 

          260,081 

Bill of Exchange

                                        133,605 

                            

                133,605 

32,618 

                     

                     

       133,605 

                     

                     

          133,605 

Financial Bills - LF

                                                    

                            

                            

69,675 

                     

                     

                   

                     

                     

                      

Total

                                   59,337,065 

                183,680 

           59,520,745 

75,006,276 

       2,009,101 

      2,378,103 

    4,761,725 

    17,033,457 

    33,338,359 

     59,520,745 

*For the purposes of Financial Statements, Securities Held for Trading are fully presented in the Balance Sheet in the short term.

III) Available-for-Sale Securities

Bank

06/30/2021

12/31/2020

By Maturity

06/30/2021

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

    101,881,147 

                   

        (65,741)

    101,815,406 

102,157,294 

                     

   13,186,026 

      6,568,697 

    31,483,260 

    50,577,423 

    101,815,406 

Treasury Certificates - CFT

               1,627 

                   

                66 

               1,693 

1,441 

                     

               207 

             1,486 

                     

                     

               1,693 

Securitized Credit

                  147 

                   

               (10)

                  137 

460 

                     

               137 

                     

                     

                     

                  137 

Financial Treasury Bills - LFT

      28,047,925 

                   

      (119,333)

      27,928,592 

20,633,213 

                     

                    

                     

      7,937,574 

    19,991,018 

      27,928,592 

National Treasury Bills - LTN

      28,872,522 

                   

      (659,119)

      28,213,403 

34,350,939 

                     

   11,533,139 

      3,256,982 

    13,423,282 

                     

      28,213,403 

National Treasury Notes - NTN (2)

      40,404,102 

                   

       730,685 

      41,134,787 

45,885,764 

                     

     1,402,455 

           11,547 

    10,122,404 

    29,598,381 

      41,134,787 

Brazilian Foreign Debt Bonds

        1,238,132 

                   

               (20)

        1,238,112 

1,285,477 

                     

        250,088 

                     

                     

         988,024 

        1,238,112 

Spanish Foreign Debt Bonds

        2,822,727 

                   

        (26,079)

        2,796,648 

                     

                    

      2,796,648 

                     

                     

        2,796,648 

Mexican Foreign Debt Securities

 

           493,965 

 

                   

 

           8,069 

 

           502,034 

 

                       

 

                     

 

                    

 

         502,034 

 

                     

 

                     

 

           502,034 

Private Securities

      35,720,735 

                   

       924,768 

      36,645,503 

      31,962,012 

       3,410,780 

     1,922,637 

      6,049,897 

    10,187,441 

    15,074,748 

      36,645,503 

Shares

                  320 

                   

             (269)

                    51 

                    53 

                   48 

                    

                     

                    

                     

                    51 

Investment Funds

        3,111,307 

                   

                   

        3,111,307 

        1,894,532 

       3,111,307 

                    

                     

                     

                     

        3,111,307 

Investment Fund Real Estate

           197,271 

                   

                   

           197,271 

           200,691 

          197,271 

                    

                     

                     

                     

           197,271 

Debentures (1)

      18,632,223 

                   

       869,496 

      19,501,719 

      14,968,154 

            18,982 

        860,829 

      1,495,364 

      6,442,439 

    10,684,105 

      19,501,719 

Promissory Notes - NP

        2,350,032 

                   

           7,775 

        2,357,807 

        4,525,164 

                     

        160,635 

         905,559 

      1,162,860 

         128,753