BSBR Banco Santander
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 March, 2020
Commission File Number: 001-34476
BANCO SANTANDER (BRASIL) S.A.
(Exact name of registrant as specified in its charter)
Avenida Presidente Juscelino Kubitschek, 2041 and 2235
Bloco A – Vila Olimpia
São Paulo, SP 04543-011
Federative Republic of Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ___X___ Form 40-F _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes _______ No ___X____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes _______ No ___X____
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes _______ No ___X____
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Comprehensive Income Statements. 15
Statements of Changes in Stockholders' Equity – Bank. 16
Statements of Changes in Stockholders' Equity – Consolidated. 17
2.Presentation of Financial Statements. 21
3.Significant Accounting Policies. 25
4.Cash and Cash Equivalents. 25
6.Securities and Derivatives Financial Instruments. 27
7.Loan Portfolio and Allowance for Loan Losses. 40
8.Tax Assets and Liabilities. 43
9.Other Receivables – Other 46
10.Dependencies Information and Foreign Subsidiary. 46
11.Investments in Affiliates and Subsidiaries Subsidiary. 47
14.Debt Instruments Eligible to Capital 50
16.Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security. 51
19.Income from Services Rendered and Banking Fees. 63
21.Other Administrative Expenses. 63
23.Other Operating Expenses. 63
25.Employee Benefit Plans - Post-Employment Benefits. 64
26.Risk Management, Capital and Sensitivity Analysis. 66
Composition of Management Bodies. 71
Declaration of directors on the financial statements. 73
Directors' Statement on Independent Auditors. 75
*Values in thousands, except when indicated.
Performance Review
Dear Stockholders:
We present the Management Report to Parent Company and Consolidated Condensed Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Bank) related to the period ended March 31, 2020, prepared in accordance with accounting practices set by Brazilian Corporate Law, the standards of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and document template provided by the Accounting National Financial System Institutions (Cosif) and the Brazilian Exchange Commission (CVM), that does not conflict with the rules issued by Bacen.
The Condensed Interim Financial Statements based on the international accounting standard issued by the International Accounting Standards Board (IASB) for the period ended March 31, 2020 will be simultaneously released at www.santander.com.br/ri.
1. Macroeconomic Environment
The Santander Bank Santander ponders that in the first quarter of 2020 the global scenario was marked by initial developments of the COVID-19 pandemic, which have intensely hit most economies and whose final effects are yet to be calculated, since the disease has not been controlled so far. The Bank judges that in the absence of this pandemic, both international and domestic environment were favorable to the materialization of a more auspicious performance of the world economy than we are likely to see in 2020. After all, important issues such as the trade war between China and the USA, the definition of the Brexit and even geopolitical items such as the dispute between Iran and the USA had already been settled. That is, Santander believes there was a favorable environment for both advanced economies and the Brazilian economy to deliver a more robust economic growth than in 2019. However, the Bank understands that the fallout of the COVID-19 has not only affected world supply chains, but it has also meant heavy limitations to persons’ capacity to move freely, which turned out to be an important shock to world demand. Given these highly uncertain circumstances, there was a generalized worsening on global financial conditions, which translated into impressive drops in financial asset prices as compared to levels seen in the previous quarter.
In Brazil, on top of misfortunes generated by the COVID-19, the Santander Bank thinks there was a deceleration in the rhythm of approval of important structural reforms, because discussions on new measures to control public expenditures or to revamp the tax system have barely shown any progress since the promulgation of the pension reform. Additionally, the Bank ponders that activity indicators continued to hint at a gradual recovery as the incentive to the domestic demand provided by the permission granted to private workers to withdraw part of their resources from the FGTS (a mandatory private workers’ fund) was limited to the third and fourth quarters of last year.
In Santander’s view, circumstances on the international and domestic milieus have been extremely unfavorable to financial asset prices in the first quarter of 2020, including the exchange rate, which ended the period far above the level seen in the fourth quarter of 2019–USD/BRL5.21 from USD/BRL4.03 in December 2019. Moreover, the Bank witnessed equity market registering an impressive drop, as the Bovespa index receded to 73,019.8 points from 115,645.3 points in the same comparison (a 37% loss in a quarter).
Furthermore, the Santander understands that the elevation seen in the Brazilian sovereign credit risk hinted at the return of suspicions about the likelihood of new structural reforms that can ensure the sustainability of public debt. Especially after the inception of several measures destined to fight the impact of the pandemic that will bloat primary fiscal deficit to quite high echelons in 2020. The Bank understands that such extraordinary measures are justifiable in the current situation, but it see risks that they turn into mandatory expenditures in the coming years. Incidentally, given this risk, the Standard & Poor’s credit rating agency reversed the change it had promoted in the outlook of the Brazilian creditworthiness from positive to stable, as it does not contemplate any chance of an improvement in the short term. Consequently, the Bank saw the 5-year Brazilian credit default swap climbing to 284.2 basis points from 99.5 basis points in the fourth quarter of 2019 – getting close to the 400 level in the end of march.
As previously written, the bank understands this worsening in the Brazilian perceived credit risk is partially related to the perspective of extraordinary measures carried out by the Brazilian government to fight the impacts of the COVID-19 in the Brazilian economy to turn into perennial public outlays as well as to procrastination of structural reforms. However, part of it is also related to worse global financial conditions than previously seen. As these global financial conditions show an improvement, the Santander evaluates there will be room for some strengthening of the exchange rate. Nonetheless, the Santander understands that a more intense reversal of the weakening registered by the Brazilian currency in the first quarter of 2020 will depend on progress regarding reforms.
At last, the Bank also considers that the extension of the monetary easing cycle carried out by the Brazilian Central Bank in tandem with its implementation of measures to pump liquidity in the financial institutions and to ensure that it will reach out the corporate sector and households were key initiatives to fight impacts of the COVID-19. Even more as these measures were implemented in an environment without any clear inflationary pressure. Incidentally, the Santander thinks the pandemics will have a net deflationary impact, which justifies a more accommodative stance from the Brazilian monetary authority.
2. Performance
2.1) Corporate Net Income
Consolidated Income Statements (R$ Millions) | 1Q20 | 1Q19 | annual changes% | 4Q19 | quarter changes % | ||||
Financial Income | 51,691.9 | 21,076.3 | 145.3 | 15,188.0 | 240.3 | ||||
Financial Expenses | (55,734.1) | (12,830.7) | 334.4 | (7,639.1) | 629.6 | ||||
Gross Profit From Financial Operations (a) | (4,042.2) | 8,245.6 | (149.0) | 7,548.9 | (153.5) | ||||
Other Operating (Expenses) Income (b) | (2,473.0) | (2,895.1) | (14.6) | (5,055.6) | (51.1) | ||||
Operating Income | (6,515.2) | 5,350.6 | (221.8) | 2,493.3 | (361.3) | ||||
Non-Operating Income | 204.8 | 0.5 | 42,481.9 | 101.0 | 102.8 | ||||
Income Before Taxes on Income and Profit Sharing | (6,310.4) | 5,351.0 | (217.9) | 2,594.3 | (343.2) | ||||
Income Tax and Social Contribution (a) | 10,606.4 | (1,376.1) | (870.8) | 1,615.3 | 556.6 | ||||
Profit Sharing | (479.1) | (468.4) | 2.3 | (339.7) | 41.0 | ||||
Non-Controlling Interest | (42.9) | (91.1) | (52.9) | (121.8) | (64.8) | ||||
Consolidated Net Income | 3,774.0 | 3,415.4 | 10.5 | 3,748.1 | 0.7 | ||||
In March 2020, the balance of the credit portfolio showed annual double-digit growth, with quality indicators at appropriate levels. In addition, due to the robust ecosystem and revenue diversification, the Bank recorded annual growth in total revenue. In the first quarter of 2020, general expenses fell 6.8% due to lower administrative and personnel expenses.
a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches and the Subsidiary Santander Brasil EFC
Banco Santander operates branches in the Cayman Islands and Luxembourg and the subsidiary Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” which are used, mainly, to raise funds in the capital and financial foreign markets, providing credit lines that are extended to clients for trade-related financings and working capital. To protect the exposures to foreign exchange rate variations, the Bank uses derivatives. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (Real) in foreign investments are nontaxable to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives is to protect the after-tax net income.
The different tax treatment of such foreign exchange rate differences results in a volatility on the operational earnings or losses and on the gross revenue tax expense (PIS/Cofins) and income taxes (IR/CSLL), as demonstrated below:
Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches | 1Q20 | 1Q19 |
Exchange Variation - Profit From Financial Operations | 18,586.05 | 225.47 |
Derivative Financial Instruments - Profit From Financial Operations | (31,411.70) | (396.76) |
Income Tax and Social Contribution | 12,298.77 | 152.84 |
PIS/Cofins - Tax Expenses | 526.88 | 18.45 |
2.2) Assets and Liabilities
Consolidated Balance Sheets | Mac/20 | Dec/19 | mar/20 vs. dec/19 changes % | ||
Current and Long-Term Assets | 986,523.8 | 844,294.7 | 16.8 | ||
Permanent Assets | 13,859.2 | 13,248.4 | 4.6 | ||
Total Assets | 1,000,383.0 | 857,543.1 | 16.7 | ||
Current and Long-Term Liabilities | 926,596.1 | 785,789.3 | 17.9 | ||
Deferred Income | 277.7 | 285.2 | (2.6) | ||
Non-Controlling Interest | 1,110.9 | 1,695.4 | (34.5) | ||
Stockholders' Equity | 72,398.3 | 69,773.2 | 3.8 | ||
Total Liabilities and Stockholders' Equity | 1,000,383.0 | 857,543.1 | 16.7 |
2.3) Stockholders’ Equity
On March 31, 2020, Banco Santander consolidated Stockholders’ Equity increased by 3.8% compared to December 31, 2019.
The change in Stockholders’ Equity between March 31, 2020 and December 31, 2019 was mainly due to the net income for the period in the amount of R$3,774 million, the positive equity valuation adjustment (marketable securities and derivative financial instruments) in the amount of R$1,572 million and in an employee benefit plan in the amount of R$534 million, due to the remeasurement of actuarial obligations due to the change in interest rates caused by the macroeconomic scenario observed in the first quarter of 2020.
For additional information, see explanatory note to financial statements 23.
2.4) Basel Index
Bacen determines that financial institutions maintain a Reference Equity (PR), PR Level I and Principal Capital compatible with the risks of their activities, higher than the minimum requirement of the Required Reference Equity, represented by the sum of the credit risk, risk market risk and operational risk.
As established in CMN Resolution No. 4,193 / 2013, the requirement for PR in 2019 was 10.5%, comprising 8.0% of Minimum Equity of Reference plus 2.5% of Additional Capital Conservation. Considering this surcharge, PR Level I increased to 8.5% and Minimum Principal Capital to 7.0%.
For the base year 2020, the PR requirement remains at 11.5%, including 8.0% of Reference Equity Minimum, plus 2.5% of Capital Conservation Additional and 1.0% of Systemic Additional. PR Level I reaches 9.5% and Minimum Principal Capital 8.0%.
The Basel ratio is calculated in accordance with the Financial Statements of the Prudential Conglomerate prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen, as shown below:
Basel Index% | Mar/20 | Dec/19 |
Basel I Ratio | 12.61 | 13.97 |
Basel Principal Capital | 11.40 | 12.90 |
Basel Regulatory Capital | 13.81 | 15.04 |
2.5) Main Subsidiaries
The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the period ended March 31, 2020, of the main subsidiaries of Banco Santander:
Subsidiaries (R$ Millions) | Total Assets | Stockholders' Equity | Net | Loan | Ownership/Interest (%) | ||||
Aymoré Crédito, Financiamento e Investimento S.A. | 48,178.6 | 1,221.0 | 245.5 | 45,224.8 | 100.00% | ||||
Getnet Adquirência e Serviços para Meios de Pagamento S.A. | 26,924.2 | 2,744.2 | 132.6 | 0.0 | 100.00% | ||||
Banco Bandepe S.A. | 25,358.4 | 5,275.8 | 0.3 | 0.0 | 100.00% | ||||
Banco Olé Consignado | 15,239.6 | 1,630.7 | 136.9 | 15,206.4 | 100.00% | ||||
Banco RCI Brasil S.A. | 12,174.1 | 1,355.6 | 57.3 | 10,362.2 | 39.89% | ||||
Santander Leasing S.A. Arrendamento Mercantil | 7,139.7 | 5,807.2 | 54.5 | 2,192.7 | 100.00% | ||||
Santander Corretora de Seguros, Investimento e Serviços S.A. | 4,994.0 | 3,180.1 | 155.9 | 0.0 | 100.00% | ||||
Santander Brasil, Establecimiento Financiero de Credito, S.A. | 4,859.1 | 4,463.7 | (22.3) | 508.2 | 100.00% | ||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | 1,596.4 | 1,578.6 | 23.0 | 0.0 | 100.00% | ||||
Santander Corretora de Câmbio e Valores Mobiliários S.A. | 1,306.0 | 678.3 | 31.5 | 0.0 | 100.00% | ||||
(1) Includes balances referring to leasing portfolio and other credits.
The financial statements of the Subsidiaries above were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, in conjunction with the CMN, Bacen rules and model of the document provided for in the Accounting Plan of Cosif Institutions, of CVM , in which they do not conflict with the rules issued by Bacen, without the elimination of transactions with related companies.
3. Corporate Restructuring
During the period ended March 31, 2020 and the year ended December 31, 2019, several corporate movements were implemented in order to reorganize the operations and activities of the entities in accordance with the business plan of Banco Santander.
For additional information, see explanatory note to financial statements nº2.
4. Strategy and Rating Agencies
For information regarding the Bank's strategy and rating at rating agencies, see the Results Report available at www.santander.com.br/ri.
5. Corporate Governance
Banco Santander's Board of Directors met and resolved:
On April 27, 2020, approve the Parent Company and Consolidated Condensed Financial Statements of Banco Santander, prepared in accordance with the accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen and the consolidated Condensed Intermediate Financial Statements of Banco Santander, prepared in accordance with International Financial Reporting Standards (IFRS), both for the period ended March 31, 2020.
On February 28, 2020, approve the resignation of Mr. Ulisses Gomes Guimarães, Director with no specific designation of the Company; (ii) know the resignation of Mr. Gilberto Duarte de Abreu Filho, Director without a specific designation of the Company; and (iii) approve the election of Mr. Sandro Rogério da Silva Gamba as an Officer without a specific designation of the Company.
On February 26, 2020, approve Banco Santander Form 20-F for the year ended December 31, 2019.
On February 26, 2020, approve Banco Santander 's Consolidated Financial Statements for the year ended December 31, 2019, prepared in accordance with International Accounting Standards (IFRS).
On February 3, 2020, approve the election of Mr. Sandro Kohler Marcondes, Vítor Ohtsuki and Geraldo José Rodrigues Alckmin Neto as Directors with no specific designation.
On January 28, 2020, approve Banco Santander Parent Company and Consolidated Condensed Financial Statements, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen for the year ended December 31, 2019.
The decisions taken by the Board of Directors on 2019, are described in the Management Report of the Parent Company and Consolidated Financial Statements of December 31, 2019.
6. Risk Management
On February 23, 2017, Bacen published CMN Resolution No. 4,557, which provides for the structure of risk and capital management (GIRC), effective from the same year. The resolution highlights the need to implement an integrated risk and capital management structure, define an integrated stress test program and declare the Risk Appetite Statement (RAS - Risk Appetite Statement), set up a Risk Committee, define a disclosure policy of published information, appointment of director for risk management, director of capital and director responsible for information disclosure policy. Banco Santander develops necessary actions on a continuous and progressive basis, aiming at adhering to the resolution. No relevant impacts were identified as a result of this standard.
For more information, see note 26 to this publication.
Capital Management Structure
Banco Santander 's capital management structure has robust governance, which supports the processes related to this topic and establishes the responsibilities of each of the teams involved. In addition, there is a clear definition of the guidelines that must be adopted for effective capital management. Further details can be found in the Risk and Capital Management Structure, available on the Investor Relations website.
Internal Audit
The Internal Audit reports directly to the Board of Directors, with the Audit Committee responsible for its supervision.
Internal Audit is a permanent function and independent from any other function or unit, whose mission is to provide the Board of Directors and senior management with independent assurance on the quality and effectiveness of internal control and risk management systems (current or emerging) and government, thus contributing to the protection of the organization's value, solvency and reputation. The Internal Audit has a quality certificate issued by the Institute of Internal Auditors (IIA).
In order to fulfill its functions and coverage risks inherent in Banco Santander activity, Internal Audit has a set of tools developed internally and updated when necessary. Among them, the risk matrix stands out, used as a planning tool, prioritizing the risk level of the auditable universe considering, among others, its inherent risks, the latest audit rating, the degree of compliance with the recommendations and its dimension. The work programs, which describe the audit tests to be carried out, are periodically reviewed.
The Audit Committee and the Board of Directors have favorably analyzed and approved the Internal Audit work plan for 2020.
7. People
People are an essential element in the Organization. After all, they are the ones who think, design, develop, interact and build what Banco Santander wants to be. This is why the Bank invests in each of the 47,192 employees here in Brazil.
For the development of these people, the Corporate Academy - Academia Santander, works for a strong, transversal culture, providing that everyone, online and in person, can improve what they already know and explore new possibilities.
Banco Santander supports leaders and managers so that they are close and available. This performance is based on three pillars: Feedback, Open Chat and Personalized Recognition, making sure there is alignment between everyone through recurring and frank conversations, career direction and special moments to reward the growth of the teams.
Banco Santander values a diverse environment, where each competence and each difference is valued. An example is the Affinity Group, created to promote diversity and inclusion based on the 5 pillars: Female Leadership; Racial Equity; Disabled people; Diversity of Formations, Experiences and Generations and the LGBT + pillar. Another good example is the Talent Show, which reached its 2nd edition in 2019. In it, Banco Santander opens space to get to know the most different performances and explore the universe of skills that exist in the Bank, allowing interaction and fraternization among colleagues.
The result of all these actions is the high level of engagement, proven by means of two surveys that were carried out annually and which brought excellent indicators. One of them points out that at least 91% of employees say they want to stay at Banco Santander for a long time. It is believed that this satisfaction reflects positively on interactions with Customers, generating greater ties, sustainable growth and investments in Society, which leads Banco Santander to be the best Bank for all stakeholders.
Due to the current context of COVID-19, Santander has made a commitment not to fire employees during the crisis.
8. Sustainable Development
Santander Brasil's Sustainability strategy is based on three pillars: (i) Strategic and efficient use of Environmental Resources, (ii) Development of Potentials and (iii) Resilient and Inclusive Economy. The Bank's vision, through these pillars, is to contribute to a better, more prosperous and fair society, maintaining excellence and responsibility in internal management, with ethical values as the basis and technology at the service of people and businesses.
In relation to the Social and Environmental Businesses, the Bank made possible, in the first quarter, around R$2 billion, considering the renewable energy lines, sustainable agribusiness, Prospera Santander Microcredit, Student Financing (undergraduate medicine), Project Finance (renewable energies), other socio-environmental businesses and participation in the structuring and advisory of Green / Transition Bonds.
Santander Brasil also published the 2019 Non-Financial Indicators Book which aims to show how, through responsible internal management and the creation of financial solutions to stimulate economic activity, it contributes to the prosperity of people and businesses. The material is audited externally and follows the guidelines of the Global Reporting Initiative Standards (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (“SASB”).
As a result of the global health crisis scenario, Banco Santander has promoted actions to support customers and society that can be seen on the Bank's website, through the link https://www.santander.com.br/camivais/cuidar.
9. Independent Audit
The policy of Banco Santander, including its subsidiaries, in contracting services not related to the auditing of the Financial Statements by its independent auditors, is based on Brazilian and international auditing standards, which preserve the auditor's independence. This reasoning provides for the following: (i) the auditor must not audit his own work, (ii) the auditor must not exercise managerial functions in his client, (iii) the auditor must not promote his client's interests, and (iv ) the need for approval of any services by the Bank's Audit Committee.
In compliance with CVM Instruction 381/2003, Banco Santander informs that in the period ended March 31, 2020, PricewaterhouseCoopers did not provide services unrelated to the independent auditing of the Financial Statements of Banco Santander and controlled companies over 5% of the total fees related to independent audit services.
In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls in place to ensure its independence, which include assessing the work performed, covering any service other than an independent audit of the Financial Statements of Banco Santander and its subsidiaries. This assessment is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and provision of professional services not related to the auditing of the Financial Statements by its independent auditors during the period ended March 31, 2020, did not affect the independence and objectivity in conducting the external audit exams carried out at Banco Santander and other entities of the Group, since the above principles were observed.
The Board od Directors
The Executive Board
(Authorized at the Board of Directors' Meeting of 04/27/2020).
Balance Sheet
Bank | Consolidated | ||||
Notes | 3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | |
Current Assets | 632,505,377 | 504,910,723 | 642,005,267 | 524,779,465 | |
Cash | 4 | 12,705,433 | 9,543,649 | 13,962,809 | 9,924,644 |
Interbank Investments | 5 | 104,692,138 | 82,235,455 | 54,702,650 | 42,571,395 |
Money Market Investments | 41,091,167 | 28,703,365 | 40,899,564 | 28,703,365 | |
Interbank Deposits | 54,633,035 | 43,230,118 | 4,834,300 | 3,565,203 | |
Foreign Currency Investments | 8,967,936 | 10,301,972 | 8,968,786 | 10,302,827 | |
Securities and Derivative Financial Instruments | 6 | 96,782,584 | 61,649,371 | 105,275,356 | 72,160,634 |
Own Portfolio | 40,446,408 | 27,746,398 | 45,966,246 | 34,097,174 | |
Subject to Repurchase Commitments | 30,243,696 | 26,824,877 | 30,231,040 | 21,338,877 | |
Derivative Financial Instruments | 18,105,577 | 2,653,751 | 17,534,959 | 8,894,341 | |
Deposited in the Central Bank | 9,762 | - | 9,762 | - | |
Privatization Currencies | 531 | 512 | 531 | 512 | |
Pledged in Guarantees | 1,353,222 | 456,012 | 4,909,431 | 3,861,909 | |
Securities Obtained from Commitments with Free Mover | 6,623,388 | 3,967,821 | 6,623,387 | 3,967,821 | |
Interbank Accounts | 59,828,469 | 78,178,662 | 69,218,429 | 88,952,546 | |
Payments and Receipts Pending Settlement | 11,954,751 | 9,027,921 | 21,040,035 | 19,267,302 | |
Restricted Deposits: | 47,860,894 | 69,121,251 | 48,173,748 | 69,663,608 | |
Central Bank Deposits | 47,860,866 | 69,121,095 | 48,173,720 | 69,663,452 | |
National Housing System (SFH) | 28 | 156 | 28 | 156 | |
Interbank Transfers | 8,179 | 7,854 | - | - | |
Correspondents | 4,645 | 21,636 | 4,646 | 21,636 | |
Lending Operations | 7 | 97,309,635 | 83,319,998 | 127,489,910 | 112,150,045 |
Public Sector | 115,175 | 153,586 | 115,175 | 153,586 | |
Private Sector | 100,738,200 | 86,455,503 | 132,012,894 | 116,405,810 | |
(Allowance for Loan Losses) | 7.e | (3,543,740) | (3,289,091) | (4,638,159) | (4,409,351) |
Leasing Operations | 7 | - | - | 1,214,405 | 1,202,645 |
Private Sector | - | - | 1,229,088 | 1,216,238 | |
(Allowance for Lease Losses) | 7.e | - | - | (14,683) | (13,593) |
Other Receivables | 259,442,188 | 188,443,558 | 268,004,785 | 195,896,586 | |
Credits for Avals and Sureties Honored | 29,708 | 23,283 | 29,708 | 377,915 | |
Foreign Exchange Portfolio | 186,164,766 | 123,396,135 | 186,164,766 | 123,396,135 | |
Income Receivable | 1,958,295 | 2,226,778 | 2,024,587 | 2,025,186 | |
Trading Account | 3,855,024 | 2,325,866 | 6,203,109 | 3,912,093 | |
Deferred Taxes | 8 | 14,551,254 | 8,850,651 | 15,614,578 | 9,915,564 |
Others | 9 | 53,310,476 | 52,071,971 | 58,377,976 | 56,713,037 |
(Allowance for Other Receivables Losses) | 7.e | (427,335) | (451,126) | (409,939) | (443,344) |
Other Assets | 1,744,930 | 1,540,030 | 2,136,923 | 1,920,970 | |
Other Assets | 1,226,261 | 1,195,777 | 1,548,637 | 1,524,102 | |
(Allowance for Valuation) | (107,283) | (115,705) | (242,940) | (254,950) | |
Prepaid Expenses | 625,952 | 459,958 | 831,226 | 651,818 | |
Bank | Consolidated | ||||
Notes | 3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | |
Long-Term Assets | 328,780,509 | 296,527,040 | 344,518,529 | 319,515,226 | |
Interbank Investments | 5 | 35,934,908 | 33,694,075 | 864,894 | 796,099 |
Interbank Deposits | 35,934,908 | 33,694,075 | 864,894 | 796,099 | |
Securities and Derivative Financial Instruments | 6 | 129,369,535 | 112,305,951 | 133,555,507 | 121,294,033 |
Own Portfolio | 20,226,142 | 23,603,436 | 20,234,152 | 28,228,324 | |
Subject to Repurchase Commitments | 82,461,498 | 71,638,459 | 82,461,498 | 71,617,304 | |
Derivative Financial Instruments | 14,449,610 | 8,532,484 | 14,449,610 | 8,546,799 | |
Deposited with the Central Bank | 1,706,975 | - | 1,706,975 | - | |
Privatization Currencies | 235 | 370 | 235 | 370 | |
Pledged in Guarantees | 10,337,604 | 8,028,432 | 14,515,566 | 12,398,466 | |
Securities Obtained from Commitments with Free Mover | 187,471 | 502,770 | 187,471 | 502,770 | |
Interbank Accounts | 312,411 | 312,411 | 312,411 | 312,411 | |
Restricted Deposits: | 312,411 | 312,411 | 312,411 | 312,411 | |
National Housing System (SFH) | 312,411 | 312,411 | 312,411 | 312,411 | |
Lending Operations | 7 | 123,538,021 | 110,094,019 | 162,091,941 | 148,292,513 |
Public Sector | 952,347 | 964,378 | 952,347 | 965,758 | |
Private Sector | 137,188,832 | 123,678,363 | 177,217,561 | 163,374,180 | |
(Allowance for Loan Losses) | 7.e | (14,603,158) | (14,548,722) | (16,077,967) | (16,047,425) |
Leasing Operations | 7 | - | - | 1,550,620 | 1,564,446 |
Public Sector | - | - | 1,399 | 1,119 | |
Private Sector | - | - | 1,572,730 | 1,583,641 | |
(Allowance for Lease Losses) | 7.e | - | - | (23,509) | (20,314) |
Other Receivables | 39,284,089 | 39,810,561 | 45,627,739 | 46,763,311 | |
Receivables for Guarantees Honored | 498,684 | 298,195 | 498,684 | 298,195 | |
Foreign Exchange Portfolio | 1,263,781 | 1,108,978 | 1,263,781 | 1,108,978 | |
Income Receivable | 153,847 | 156,939 | 153,847 | 156,939 | |
Trading and Intermediation of Values | - | - | - | 562,425 | |
Deferred Taxes | 8 | 24,495,091 | 19,223,760 | 27,371,151 | 21,988,807 |
Others | 9 | 13,330,371 | 19,395,717 | 16,879,530 | 23,122,032 |
(Allowance for Other Receivables Losses) | 7.e | (457,685) | (373,028) | (539,254) | (474,065) |
Other Assets | 341,545 | 310,023 | 515,417 | 492,413 | |
Temporary Assets | 1,444 | 1,622 | 56,694 | 56,875 | |
(Allowance for Losses) | (1,444) | (1,622) | (1,449) | (1,630) | |
Prepaid Expenses | 341,545 | 310,023 | 460,172 | 437,168 | |
Permanent Assets | 40,502,230 | 37,097,964 | 13,859,186 | 13,248,376 | |
Investments | 30,325,527 | 26,831,540 | 350,390 | 354,490 | |
Investments in Affiliates and Subsidiaries: | 11 | 30,304,780 | 26,810,793 | 329,573 | 333,674 |
Domestic | 25,841,043 | 23,263,738 | 329,573 | 333,674 | |
Foreign | 4,463,737 | 3,547,055 | - | - | |
Other Investments | 45,064 | 45,064 | 50,339 | 50,344 | |
(Allowance for Losses) | (24,317) | (24,317) | (29,522) | (29,528) | |
Fixed Assets | 6,187,904 | 6,214,168 | 7,136,289 | 7,181,088 | |
Real Estate in Use | 2,461,442 | 2,467,216 | 2,757,392 | 2,753,149 | |
Others Fixed Assets | 13,815,825 | 13,818,040 | 15,504,990 | 15,483,559 | |
(Accumulated Depreciation) | (10,089,363) | (10,071,088) | (11,126,093) | (11,055,620) | |
Intangible Assets | 12 | 3,988,799 | 4,052,256 | 6,372,507 | 5,712,798 |
Goodwill | 26,481,816 | 26,496,592 | 29,870,982 | 29,050,911 | |
Others Intangible Assets | 8,558,107 | 8,485,328 | 9,231,410 | 9,196,813 | |
(Accumulated Amortization) | (31,051,124) | (30,929,664) | (32,729,885) | (32,534,926) | |
Total Assets | 1,001,788,116 | 838,535,727 | 1,000,382,982 | 857,543,067 | |
Bank | Consolidated | ||||
Notes | 3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | |
Current Liabilities | 712,977,676 | 594,642,669 | 713,357,224 | 598,591,332 | |
Deposits | 13 | 239,410,222 | 214,983,542 | 237,271,334 | 212,838,421 |
Demand Deposits | 34,120,100 | 29,392,188 | 34,023,604 | 29,107,534 | |
Savings Deposits | 50,184,800 | 49,039,857 | 50,184,800 | 49,039,857 | |
Interbank Deposits | 5,949,835 | 4,573,086 | 4,339,232 | 3,457,996 | |
Time Deposits | 149,155,487 | 131,978,411 | 148,723,698 | 131,096,194 | |
Other Deposits | - | - | - | 136,840 | |
Money Market Funding | 13 | 129,243,371 | 111,939,869 | 123,145,765 | 106,248,412 |
Own Portfolio | 110,847,681 | 97,227,938 | 104,750,075 | 91,536,480 | |
Third Parties | 11,190,020 | 8,743,348 | 11,190,020 | 8,743,348 | |
Linked to Trading Portfolio Operations | 7,205,670 | 5,968,583 | 7,205,670 | 5,968,584 | |
Funds from Acceptance and Issuance of Securities | 13 | 53,027,551 | 60,517,226 | 48,243,111 | 51,265,094 |
Exchange Acceptances | - | - | 680,591 | 34,240 | |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 37,940,762 | 42,445,229 | 39,266,253 | 43,567,117 | |
Securities Issued Abroad | 13,054,001 | 16,295,922 | 6,263,479 | 5,887,662 | |
Funding by Structured Operations Certificates | 2,032,788 | 1,776,075 | 2,032,788 | 1,776,075 | |
Receipts and Payments Pending Settlement | 1,275,648 | 41,756 | 1,506,369 | 369,578 | |
Interbank Transfers | 1,203,283 | - | 1,434,004 | 327,822 | |
Interbank Accounts | 72,365 | 41,756 | 72,365 | 41,756 | |
Interdependency Relations | 4,856,765 | 4,019,119 | 4,856,765 | 4,019,119 | |
Third-Party Funds in Transit | 4,856,604 | 4,002,824 | 4,856,604 | 4,002,824 | |
Internal Transfers of Assets | 161 | 16,295 | 161 | 16,295 | |
Borrowings | 13 | 56,654,323 | 43,870,657 | 53,835,066 | 41,322,712 |
Local Borrowings - Other Institutions | - | - | 43,093 | 33,585 | |
Foreign Borrowings | 56,654,323 | 43,870,657 | 53,791,973 | 41,289,127 | |
Domestic Onlendings - Official Institutions | 13 | 3,476,150 | 3,697,638 | 3,476,150 | 3,697,638 |
National Economic and Social Development Bank (BNDES) | 1,276,307 | 1,355,447 | 1,276,307 | 1,355,447 | |
Federal Savings and Loan Bank (CEF) | 93,820 | 94,725 | 93,820 | 94,725 | |
National Equipment Financing Authority (FINAME) | 1,696,363 | 1,755,646 | 1,696,363 | 1,755,646 | |
Other Institutions | 409,660 | 491,820 | 409,660 | 491,820 | |
Derivative Financial Instruments | 6 | 15,525,677 | 3,774,395 | 15,314,706 | 10,112,463 |
Derivative Financial Instruments | 15,525,677 | 3,774,395 | 15,314,706 | 10,112,463 | |
Other Payables | 209,507,969 | 151,798,467 | 225,707,958 | 168,717,895 | |
Collected Taxes and Other | 1,388,938 | 96,928 | 1,410,496 | 131,179 | |
Foreign Exchange Portfolio | 184,195,667 | 116,991,021 | 184,195,667 | 116,991,021 | |
Social and Statutory | 308,595 | 8,188,762 | 371,974 | 8,376,961 | |
Tax and Social Security | 8 | 1,924,670 | 2,854,815 | 2,963,418 | 4,092,434 |
Trading Account | 676,839 | 1,063,403 | 2,418,788 | 3,149,991 | |
Debt Instruments Eligible to Compose Capital | 14 | 220,487 | 170,939 | 220,487 | 170,939 |
Others | 15 | 20,792,773 | 22,432,599 | 34,127,128 | 35,805,370 |
Bank | Consolidated | ||||
Notes | 3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | |
Long-Term Liabilities | 216,218,193 | 173,943,594 | 213,238,901 | 187,197,923 | |
Deposits | 13 | 67,820,627 | 59,228,624 | 66,613,935 | 60,089,570 |
Interbank Deposits | 109,527 | 100,686 | 563,356 | 841,294 | |
Time Deposits | 67,711,100 | 59,127,938 | 66,050,579 | 59,248,276 | |
Money Market Funding | 13 | 23,615,431 | 17,692,578 | 23,615,432 | 17,692,578 |
Own Portfolio | 240,057 | 159,745 | 240,058 | 159,745 | |
Linked to Trading Portfolio Operations | 23,375,374 | 17,532,833 | 23,375,374 | 17,532,833 | |
Funds from Acceptance and Issuance of Securities | 13 | 50,390,302 | 31,062,142 | 40,164,891 | 34,697,521 |
Exchange Acceptances | - | - | 884,593 | 1,557,513 | |
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | 30,047,025 | 26,271,049 | 32,399,487 | 28,644,786 | |
Securities Issued Abroad | 18,597,263 | 3,123,591 | 5,134,797 | 2,827,720 | |
Funding by Structured Operations Certificates | 1,746,014 | 1,667,502 | 1,746,014 | 1,667,502 | |
Borrowings | 13 | 1,725,372 | 1,788,469 | 1,770,623 | 1,802,272 |
Local Borrowings - Other Institutions | - | - | 45,251 | 13,803 | |
Foreign Borrowings | 1,725,372 | 1,788,469 | 1,725,372 | 1,788,469 | |
Domestic Onlendings - Official Institutions | 13 | 7,772,692 | 8,056,939 | 7,772,692 | 8,056,939 |
National Economic and Social Development Bank (BNDES) | 4,729,653 | 4,897,785 | 4,729,653 | 4,897,785 | |
Federal Savings and Loan Bank (CEF) | 66,189 | 68,325 | 66,189 | 68,325 | |
National Equipment Financing Authority (FINAME) | 2,976,850 | 3,063,173 | 2,976,850 | 3,063,173 | |
Other Institutions | - | 27,656 | - | 27,656 | |
Derivative Financial Instruments | 6 | 17,908,223 | 10,208,817 | 18,121,373 | 10,510,899 |
Derivative Financial Instruments | 17,908,223 | 10,208,817 | 18,121,373 | 10,510,899 | |
Other Payables | 46,985,546 | 45,906,025 | 55,179,955 | 54,348,144 | |
Foreign Exchange Portfolio | 1,126,545 | 1,004,861 | 1,126,545 | 1,004,861 | |
Tax and Social Security | 8 | 3,157,665 | 3,659,656 | 3,535,976 | 4,199,423 |
Trading Account | - | - | 581,406 | 557,370 | |
Debt Instruments Eligible to Compose Capital | 14 | 13,121,512 | 10,005,022 | 13,121,512 | 10,005,022 |
Others | 15 | 29,579,824 | 31,236,486 | 36,814,516 | 38,581,468 |
Deferred Income | 261,139 | 261,741 | 277,668 | 285,219 | |
Deferred Income | 261,139 | 261,741 | 277,668 | 285,219 | |
Stockholders' Equity | 17 | 72,331,108 | 69,687,723 | 72,398,339 | 69,773,232 |
Capital: | 57,000,000 | 57,000,000 | 57,000,000 | 57,000,000 | |
Brazilian Residents | 4,808,186 | 4,808,186 | 4,808,186 | 4,808,186 | |
Foreign Residents | 52,191,814 | 52,191,814 | 52,191,814 | 52,191,814 | |
Capital Reserves | 197,561 | 197,369 | 195,936 | 194,115 | |
Profit Reserves | 12,909,736 | 12,909,736 | 12,909,734 | 12,986,778 | |
Adjustment to Fair Value | (770,150) | 261,753 | (763,712) | 273,474 | |
Retained Earnings | 3,788,540 | - | 3,850,960 | - | |
(-) Treasury Shares | (794,579) | (681,135) | (794,579) | (681,135) | |
Non Controlling Interest | 17.e | - | - | 1,110,850 | 1,695,361 |
Total Stockholders' Equity | 72,331,108 | 69,687,723 | 73,509,189 | 71,468,593 | |
Total Liabilities | 1,001,788,116 | 838,535,727 | 1,000,382,982 | 857,543,067 | |
The accompanying notes from Management are an integral part of these financial statements. |
| ||||
Income Statements
Bank | Consolidated | ||||
Notes | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | |
Income Related to Financial Operations | 48,959,478 | 18,890,344 | 51,691,916 | 21,076,296 | |
Loan Operations | 16,958,011 | 10,035,117 | 20,655,005 | 13,096,703 | |
Leasing Operations | - | - | 82,461 | 85,034 | |
Securities Transactions | 6.a | 35,664,305 | 6,451,053 | 34,381,634 | 5,555,919 |
Derivatives Transactions | 308,119 | (989,676) | 544,242 | (1,081,401) | |
Foreign Exchange Operations | (4,628,416) | 2,411,869 | (4,633,697) | 2,431,681 | |
Compulsory Deposits | 657,459 | 981,981 | 662,271 | 988,360 | |
Expenses on Financial Operations | (54,681,130) | (12,443,105) | (55,734,144) | (12,830,660) | |
Funding Operations Market | 13.b | (28,945,193) | (7,721,809) | (29,148,817) | (7,663,975) |
Borrowings and Onlendings Operations | (22,093,886) | (2,151,813) | (22,191,526) | (2,105,802) | |
Operations of Sale or Transfer of Financial Assets | (791,598) | (41,497) | (807,418) | (47,437) | |
Allowance for Loan Losses | 7.f | (2,850,453) | (2,527,986) | (3,586,383) | (3,013,446) |
Gross Income Related to Financial Operations | (5,721,652) | 6,447,239 | (4,042,228) | 8,245,636 | |
Other Operating Revenues (Expenses) | (1,391,540) | (1,726,890) | (2,472,989) | (2,895,080) | |
Banking Service Fees | 19 | 2,366,497 | 2,509,472 | 3,194,598 | 3,316,307 |
Income Related to Bank Charges | 19 | 1,115,778 | 1,047,261 | 1,287,686 | 1,212,552 |
Personnel Expenses | 20 | (1,627,184) | (1,625,276) | (1,873,708) | (1,866,433) |
Other Administrative Expenses | 21 | (2,601,387) | (2,431,063) | (3,064,743) | (2,836,982) |
Tax Expenses | (231,023) | (761,626) | (526,058) | (1,035,345) | |
Investments in Affiliates and Subsidiaries | 11 | 895,552 | 890,864 | 7,272 | 11,352 |
Other Operating Revenues | 22 | 1,417,149 | 532,038 | 1,882,096 | 666,821 |
Other Operating Expenses | 23 | (2,726,922) | (1,888,560) | (3,380,132) | (2,363,352) |
Operating Income | (7,113,192) | 4,720,349 | (6,515,217) | 5,350,556 | |
Non-Operating Income | 24 | 201,446 | 663 | 204,819 | 481 |
Income Before Taxes on Income and Profit Sharing | (6,911,746) | 4,721,012 | (6,310,398) | 5,351,037 | |
Income Tax and Social Contribution | 8 | 11,137,790 | (895,478) | 10,606,419 | (1,376,082) |
Provision for Income Tax | (144,241) | 18,627 | (548,650) | (385,287) | |
Provision for Social Contribution Tax | (103,883) | (4,554) | (323,978) | (187,905) | |
Deferred Tax Credits | 11,385,914 | (909,551) | 11,479,047 | (802,890) | |
Profit Sharing | (437,504) | (426,990) | (479,097) | (468,440) | |
Non Controlling Interest | 17.e | - | - | (42,921) | (91,098) |
Net Income | 3,788,540 | 3,398,544 | 3,774,003 | 3,415,417 | |
Number of Shares (Thousands) | 17.a | 7,498,531 | 7,476,701 | ||
Net Income per Thousand Shares (R$) | 505.24 | 454.55 |
|
The accompanying notes from Management are an integral part of these financial statements.
Comprehensive Income Statements
Bank | Consolidated | |||
01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | |
Profit for the Period | 3,788,540 | 3,398,544 | 3,774,003 | 3,415,417 |
Other Comprehensive Income that will be subsequently reclassified for profit or loss when specific conditions are met: | (1,566,247) | 648,284 | (1,565,489) | 647,064 |
Available-for-sale financial assets | (1,452,266) | 1,539,746 | (1,451,508) | 701,833 |
Available-for-sale financial assets | (2,648,685) | 2,064,021 | (2,647,927) | 1,226,108 |
Income taxes | 1,196,419 | (524,275) | 1,196,419 | (524,275) |
Cash flow hedges | (113,981) | (891,462) | (113,981) | (54,769) |
Cash flow hedges | (167,964) | (919,364) | (167,964) | (82,671) |
Income taxes | 53,983 | 27,902 | 53,983 | 27,902 |
Other Comprehensive Income that won't be reclassified for Net income: | 534,346 | (8,968) | 534,346 | (8,968) |
Defined Benefits plan | 534,346 | (8,968) | 534,346 | (8,968) |
Defined Benefits plan | 988,128 | 23 | 988,128 | 23 |
Income taxes | (453,782) | (8,991) | (453,782) | (8,991) |
Comprehensive Income for the Period | 2,756,639 | 4,037,860 | 2,742,860 | 4,053,513 |
The accompanying notes from Management are an integral part of these financial statements.
Statements of Changes in Stockholders' Equity – Bank
Profit Reserves | Adjustment to Fair Value | ||||||||||||||||||||
Notes | Capital | Capital Reserves | Legal Reserve | Reserve for Dividend Equalization | Own Position | Affiliates and Subsidiaries | Others Adjustment to Fair Value | Retained Earnings | (-)Treasury Shares | Total | |||||||||||
Balances as of December 31, 2018 | 57,000,000 | 140,707 | 3,113,605 | 6,506,949 | 1,885,972 | 114,491 | (3,071,043) | - | (461,432) | 65,229,249 | |||||||||||
Employee Benefit Plans | - | - | - | - | - | - | (679,298) | - | - | (679,298) | |||||||||||
Treasury Shares | - | - | - | - | - | - | - | - | (218,814) | (218,814) | |||||||||||
Emission Costs of Treasury Shares | - | - | - | - | - | - | - | - | (889) | (889) | |||||||||||
Result of Treasury Shares | - | 5,796 | - | - | - | - | - | - | - | 5,796 | |||||||||||
Reservations for Share - Based Payment |
| - | 50,866 | - | - | - | - | - | - | - | 50,866 | ||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
| - | - | - | - | 2,034,742 | (23,111) | - | - | - | 2,011,631 | ||||||||||
Net Income | - | - | - | - | - | - | - | 14,088,490 | - | 14,088,490 | |||||||||||
Allocations: | |||||||||||||||||||||
Legal Reserve | 17.c | - | - | 704,459 | - | - | - | - | (704,459) | - | - | ||||||||||
Dividends | 17.b | - | - | - | - | - | - | - | (6,790,000) | - | (6,790,000) | ||||||||||
Interest on Capital | 17.b | - | - | - | - | - | - | - | (4,010,000) | - | (4,010,000) | ||||||||||
Reserve for Dividend Equalization | 17.c | - | - | - | 2,584,723 | - | - | - | (2,584,723) | - | - | ||||||||||
Other |
| - | - | - | - | - | - | - | 692 | - | 692 | ||||||||||
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 | |||||||||||
Changes in the Period | - | 56,662 | 704,459 | 2,584,723 | 2,034,742 | (23,111) | (679,298) | - | (219,703) | 4,458,474 | |||||||||||
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 | - | - | - | - | - | - | 534,344 | - | - | 534,344 | |||||||||||
Treasury Shares | - | - | - | - | - | - | - | - | (113,444) | (113,444) | |||||||||||
Reservations for Share - Based Payment |
| - | 192 | - | - | - | - | - | - | - | 192 | ||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments |
| - | - | - | - | (1,568,708) | 2,461 | - | - | - | (1,566,247) | ||||||||||
Net Income | - | - | - | - | - | - | - | 3,788,540 | - | 3,788,540 | |||||||||||
Balances as of March 31, 2020 | 57,000,000 | 197,561 | 3,818,064 | 9,091,672 | 2,352,006 | 93,841 | (3,215,997) | 3,788,540 | (794,579) | 72,331,108 | |||||||||||
Changes in the Period | - | 192 | - | - | (1,568,708) | 2,461 | 534,344 | 3,788,540 | (113,444) | 2,643,385 | |||||||||||
Statements of Changes in Stockholders' Equity – Consolidated
Profit reserves | Adjustment to fair value | ||||||||||||||||||||||||
Notes | Capital | Capital Reserves | Legal Reserve | Reserve for Dividend Equalization | Own Position | Affiliates and Subsidiaries | Others Adjustment to Fair Value | Retained Earnings | (-)Treasury Shares | Stockholders' Equity | Minority Interest | Total Stockholders' Equity | |||||||||||||
Balances as of December 31, 2018 | 57,000,000 | 142,414 | 3,113,606 | 6,509,735 | 1,885,972 | 114,491 | (3,071,043) | - | (461,432) | 65,233,743 | 2,007,334 | 67,241,077 | |||||||||||||
Employee Benefit Plans | - | - | - | - | - | - | (679,299) | - | - | (679,299) | - | (679,299) | |||||||||||||
Treasury Shares | - | - | - | - | - | - | - | - | (218,814) | (218,814) | - | (218,814) | |||||||||||||
Result of Treasury Shares | - | 5,795 | - | - | - | - | - | - | - | 5,795 | - | 5,795 | |||||||||||||
Reservations for Share - Based Payment |
| - | 45,906 | - | - | - | - | - | - | - | 45,906 | - | 45,906 | ||||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | 2,046,464 | (23,111) | - | - | - | 2,023,353 | - | 2,023,353 | |||||||||||||
Capital Restructuring | - | - | - | - | - | - | - | - | (889) | (889) | - | (889) | |||||||||||||
Net Income | - | - | - | - | - | - | - | 14,180,987 | - | 14,180,987 | - | 14,180,987 | |||||||||||||
Allocations: | |||||||||||||||||||||||||
Legal Reserve | 17.c | - | - | 704,459 | - | - | - | - | (704,459) | - | - | - | - | ||||||||||||
Dividends | 17.b | - | - | - | - | - | - | - | (6,790,000) | - | (6,790,000) | - | (6,790,000) | ||||||||||||
Provision of Interest on Capital | 17.b | - | - | - | - | - | - | - | (4,010,000) | - | (4,010,000) | - | (4,010,000) | ||||||||||||
Reserve for Dividend Equalization | 17.c | - | - | - | 2,584,721 | - | - | - | (2,584,721) | - | - | - | - | ||||||||||||
Unrealized Profit | - | - | - | 74,257 | - | - | - | (92,497) | - | (18,240) | - | (18,240) | |||||||||||||
Non Controlling Interest Results | 17.e | - | - | - | - | - | - | - | - | - | - | (311,973) | (311,973) | ||||||||||||
Other | - | - | - | - | - | - | - | 690 | - | 690 | - | 690 | |||||||||||||
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 | |||||||||||||
Changes in the Period | - | 51,701 | 704,459 | 2,658,978 | 2,046,464 | (23,111) | (679,299) | - | (219,703) | 4,539,489 | (311,973) | 4,227,516 | |||||||||||||
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 | - | - | - | - | - | - | 534,345 | - | - | 534,345 | - | 534,345 | |||||||||||||
Treasury Shares | - | - | - | - | - | - | - | - | (113,444) | (113,444) | - | (113,444) | |||||||||||||
Reservations for Share - Based Payment |
| - | 1,821 | - | - | - | - | - | - | - | 1,821 | - | 1,821 | ||||||||||||
Adjustment to Fair Value - Securities and Derivative Financial Instruments | - | - | - | - | (1,573,992) | 2,461 | - | - | - | (1,571,531) | - | (1,571,531) | |||||||||||||
Net Income | - | - | - | - | - | - | - | 3,774,003 | - | 3,774,003 | - | 3,774,003 | |||||||||||||
Unrealized Profit | - | - | - | (77,044) | - | - | - | 77,044 | - | - | - | - | |||||||||||||
Non Controlling Interest Results | 17.e | - | - | - | - | - | - | - | - | - | - | (584,511) | (584,511) | ||||||||||||
Other | - | - | - | - | - | - | - | (87) | - | (87) | - | (87) | |||||||||||||
Balances as of March 31, 2020 | 57,000,000 | 195,936 | 3,818,065 | 9,091,669 | 2,358,444 | 93,841 | (3,215,997) | 3,850,960 | (794,579) | 72,398,339 | 1,110,850 | 73,509,189 | |||||||||||||
Changes in the Period | - | 1,821 | - | (77,044) | (1,573,992) | 2,461 | 534,345 | 3,850,960 | (113,444) | 2,625,107 | (584,511) | 2,040,596 | |||||||||||||
Cash Flows Statements
Bank | Consolidated | ||||||||||||
01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | ||||||||||
Notes | |||||||||||||
Operational Activities | |||||||||||||
Net Income | 3,788,540 | 3,398,544 | 3,774,003 | 3,415,417 | |||||||||
Adjustment to Net Income | (9,296,441) | 3,709,555 | (6,604,470) | 5,233,301 | |||||||||
Allowance for Loan Losses | 7,e | 2,850,453 | 2,527,986 | 3,586,383 | 3,013,446 | ||||||||
Provision for Legal Proceedings and Administrative and Legal Obligations | 16.c | 310,029 | 33,049 | 352,636 | 100,335 | ||||||||
Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations | 16.c | 121,501 | 125,453 | 140,639 | 152,943 | ||||||||
Deferred Tax Credits and Liabilities | 8 | (11,385,914) | 982,626 | (11,479,047) | 897,629 | ||||||||
Equity in Affiliates and Subsidiaries | 11 | (895,552) | (890,864) | (7,272) | (11,352) | ||||||||
Depreciation and Amortization | 21 | 606,575 | 514,079 | 750,968 | 649,632 | ||||||||
Recognition (Reversal) Allowance for Other Assets Losses | 24 | (8,518) | 8,056 | (12,111) | 5,895 | ||||||||
Gain (Loss) on Sale of Other Assets | 24 | (3,187) | 3,855 | 285 | 6,470 | ||||||||
Gain (Loss) on Sale of Investments | 24 | (168,588) | - | (168,588) | (2,467) | ||||||||
Provision for Financial Guarantees | 23 | - | 2,903 | - | 2,903 | ||||||||
Monetary Adjustment of Escrow Deposits | 22 | (107,623) | (109,296) | (121,787) | (131,041) | ||||||||
Recoverable Taxes | 22 | (84,692) | (20,718) | (94,754) | (30,129) | ||||||||
Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents | (7,516) | 6,429 | (7,516) | 6,429 |
| ||||||||
Effects of Changes in Foreign Exchange Rates on Assets and Liabilities | 437,309 | 494,682 | 437,309 | 494,682 |
| ||||||||
Others | (960,718) | 31,315 | 18,385 | 77,926 | |||||||||
Changes on Assets and Liabilities | 18,149,285 | (1,061,625) | 25,450,121 | (2,239,590) | |||||||||
Decrease (Increase) in Interbank Investments | (18,765,490) | 18,689,433 | (6,776,506) | 17,903,640 | |||||||||
Decrease (Increase) in Securities and Derivative Financial Instruments | (34,380,717) | 913,226 | (34,212,006) | 2,032,076 |
| ||||||||
Decrease (Increase) in Lending and Leasing Operations | (30,033,172) | (9,460,067) | (32,497,356) | (11,764,258) | |||||||||
Decrease (Increase) in Deposits on Central Bank of Brazil | 21,260,229 | (1,744,083) | 21,489,732 | (1,748,190) | |||||||||
Decrease (Increase) in Other Receivables | (59,310,993) | (14,014,033) | (59,435,607) | (13,938,378) | |||||||||
Decrease (Increase) in Other Assets | (197,516) | 139,026 | (202,412) | 130,922 | |||||||||
Net Change on Other Interbank and Interbranch Accounts | (838,499) | 7,625 | 218,822 | 3,659,245 | |||||||||
Increase (Decrease) in Deposits | 33,018,683 | (2,094,186) | 30,957,278 | 290,186 | |||||||||
Increase (Decrease) in Money Market Funding | 23,226,354 | (22,171,923) | 22,820,206 | (22,528,537) | |||||||||
Increase (Decrease) in Borrowings | 7,019,259 | 10,639,619 | 6,779,395 | 10,649,716 | |||||||||
Increase (Decrease) in Other Liabilities | 77,151,749 | 18,756,426 | 77,184,532 | 14,565,269 | |||||||||
Increase (Decrease) in Change in Deferred Income | (602) | (12,697) | (7,550) | (18,259) | |||||||||
Income Tax Recovered/(Paid) | - | (709,991) | (868,407) | (1,473,022) | |||||||||
Net Cash Provided by (Used in) Operational Activities | 12,641,384 | 6,046,474 | 22,619,654 | 6,409,128 | |||||||||
Investing Activities | |||||||||||||
Increase in Equity at Affiliates and Subsidiaries | 11 | (220,000) | (144,999) | - | - | ||||||||
Purchase of Fixed Assets | (249,288) | (343,422) | (329,797) | (397,758) | |||||||||
Purchase of Intangible Assets | (203,054) | (187,091) | (965,795) | (226,160) | |||||||||
Net Cash Received on Sale/Reduction of Investments | - | - | 5 | 2,467 | |||||||||
Acquisition of Minority Residual Interest in Subsidiary | 2.c | (1,601,100) | (1,291,630) | - | (1,291,630) | ||||||||
Proceeds from Assets not in Use | 139,067 | 119,079 | 143,516 | 116,458 | |||||||||
Proceeds from Property for Own Use | 6,876 | 10,496 | 30,350 | 14,202 | |||||||||
Proceeds from Affiliates and Subsidiaries | 97,512 | - | 2,625 | - | |||||||||
Dividends and Interest on Capital Received | 270,152 | 77,790 | (5,165) | 3,609 | |||||||||
Net Cash Provided by (Used in) Investing Activities | (1,759,835) | (1,759,777) | (1,124,261) | - | |||||||||
Financing Activities | |||||||||||||
Purchase of Own Share | 17.d | (113,444) | (59,717) | (113,444) | (59,717) | ||||||||
Long Term Issuance | 28,029,817 | 12,365,304 | 18,878,144 | 13,260,546 | |||||||||
Long Term Payments | (22,955,878) | (10,429,727) | (23,115,344) | (10,839,268) | |||||||||
Subordinated Debts - Payments | - | (9,924,747) | - | (9,924,747) | |||||||||
Dividends and Interest on Capital Paid | (6,755,750) | (4,342,007) | (7,690,558) | (4,419,230) | |||||||||
Increase (decrease) in Minority Interest | - | - | 2 | (131,395) | |||||||||
Capital Increase in Controlled Companies Held by Minority Interest | 11 | - | - | - | 100,000 | ||||||||
Net Cash Provided by (Used in) Financing Activities | (1,795,255) | (12,390,894) | (12,041,200) | (12,013,811) | |||||||||
Exchange Variation on Cash and Cash Equivalents | 7,516 | (6,429) | 7,516 | (6,429) | |||||||||
Increase (Decrease) in Cash and Cash Equivalents | 9,093,810 | (8,110,626) | 9,461,709 | (7,389,924) | |||||||||
Cash and Cash Equivalents at the Beginning of Period | 4 | 21,421,432 | 25,854,948 | 21,443,663 | 25,285,982 | ||||||||
Cash and Cash Equivalents at the End of Period | 4 | 30,515,242 | 17,744,322 | 30,905,372 | 17,896,058 | ||||||||
Statements of Value Added
Bank | Consolidated | |||||||||||||||
01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | |||||||||||||
Notes | ||||||||||||||||
Income Related to Financial Operations | 48,959,478 | 18,890,344 | 51,691,916 | 21,076,296 | ||||||||||||
Income Related to Bank Charges and Banking Service Fees | 19 | 3,482,275 | 3,556,733 | 4,482,284 | 4,528,859 | |||||||||||
Allowance for Loans Losses | 7.f | (2,850,453) | (2,527,986) | (3,586,383) | (3,013,446) | |||||||||||
Other Revenues and Expenses | 10,008,336 | (1,355,859) | 9,871,087 | (1,696,050) | ||||||||||||
Financial Expenses | (51,830,677) | (9,915,119) | (52,147,761) | (9,817,214) | ||||||||||||
Third-party Input | (1,790,833) | (1,728,797) | (2,104,825) | (1,992,948) | ||||||||||||
Materials, Energy and Others | (67,905) | (67,074) | (71,602) | (69,691) | ||||||||||||
Third-Party Services | 21 | (429,549) | (457,677) | (575,619) | (573,001) | |||||||||||
Others | (1,293,379) | (1,204,046) | (1,457,604) | (1,350,256) | ||||||||||||
Gross Added Value | 5,978,126 | 6,919,316 | 8,206,318 | 9,085,497 | ||||||||||||
Retentions | ||||||||||||||||
Depreciation and Amortization | 21 | (606,575) | (514,079) | (750,968) | (649,632) | |||||||||||
Added Value Produced Net | 5,371,551 | 6,405,237 | 7,455,350 | 8,435,865 | ||||||||||||
Added Value Received from Transfer Investments in Affiliates and Subsidiaries | 11 | 895,552 | 890,864 | 7,272 | 11,352 | |||||||||||
Added Value to Distribute | 6,267,103 | 7,296,101 | 7,462,622 | 8,447,217 | ||||||||||||
Added Value Distribution | ||||||||||||||||
Employee | 1,857,166 | 29.6% | 1,886,178 | 25.9% | 2,108,376 | 28.3% | 2,142,394 | 25.4% | ||||||||
Compensation | 20 | 936,951 | 925,238 | 1,058,247 | 1,065,946 | |||||||||||
Benefits | 20 | 319,215 | 328,245 | 366,331 | 371,345 | |||||||||||
Government Severance Indemnity Funds for Employees - FGTS | 80,786 | 108,325 | 96,332 | 123,918 | ||||||||||||
Others | 520,214 | 524,370 | 587,466 | 581,185 | ||||||||||||
Taxes and Contributions | 417,418 | 6.7% | 1,823,192 | 25.0% | 1,328,372 | 17.8% | 2,603,906 | 30.8% | ||||||||
Federal | 253,259 | 1,638,147 | 1,119,844 | 2,363,681 | ||||||||||||
State | 99 | 32 | 130 | 48 | ||||||||||||
Municipal | 164,060 | 185,013 | 208,398 | 240,177 | ||||||||||||
Compensation of Third-Party Capital - Rental | 21 | 203,979 | 3.3% | 188,187 | 2.6% | 208,950 | 2.8% | 194,402 | 2.3% | |||||||
Remuneration of Interest on Capital | 3,788,540 | 60.5% | 3,398,544 | 46.5% | 3,816,924 | 51.1% | 3,506,515 | 41.5% | ||||||||
Interest on Equity | 17.b | - | 1,000,000 | - | 1,000,000 | |||||||||||
Profit Reinvestment | 3,788,540 | 2,398,544 | 3,859,845 | 2,597,613 | ||||||||||||
Participation Results of Non-Controlling Stockholders | 17.f | - | - | (42,921) | (91,098) | |||||||||||
Total | 6,267,103 | 100.1% | 7,296,101 | 100.0% | 7,462,622 | 100.0% | 8,447,217 | 100.0% | ||||||||
*Values expressed in thousands, except when indicated.
1. General Information
Banco Santander (Brasil) S.A. (Banco Santander or Bank), directly and indirectly controlled by Banco Santander, S.A., based in Spain (Banco Santander Spain), is the lead institution of the Financial and Prudential Conglomerate (Conglomerate Santander) under the authority of the Brazilian Central Bank (Bacen), established as a corporation, with head headquarters at Avenida Presidente Juscelino Kubitschek, 2041 and 2235 - A Block - Vila Olímpia – São Paulo - SP. Banco Santander operates as a multiple service bank, conducting its operations by means of portfolios such as commercial, investment, loans and advances, mortgage loans, leasing and foreign exchange. Through its subsidiaries, the Bank also operates on the segments of payment industry, shares club management, securities and insurance brokerage operations, consumer finance, payroll-deductible loans, digital platforms, management and recovery of non-performing loans, capitalization and pension plan. The Bank's activities are conducted within the context of a group of institutions that operate on an integrated basis in the financial market. The corresponding benefits and costs of providing services are absorbed between them and are conducted in the normal course of business and under commutative conditions.
2. Presentation of Financial Statements
a) Presentation
The Parent Company and Consolidated Condensed interim financial statements of Banco Santander (Brasil) S.A., which include its dependence abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with accounting practices adopted in Brazil, established by the Brazilian Corporation Law, National Monetary System (CMN), Central Bank of Brazil (Bacen) and the model of the document provided for in the Accounting Plan of the Institutions of the National Financial System (COSIF) of the Brazilian Securities and Exchange Commission (CVM), in which they do not conflict with the standards issued by the Central Bank and show all information relevant to the financial statements, which are consistent with those used by management in its management.
The CMN Resolution nº.4,720/2019 and Bacen Circular nº.3,959/2019 established general criteria and procedures for the preparation and disclosure of the Financial Statements effective from January / 2020, including: the presentation of the Statement of Comprehensive Income and the presentation of Financial Statements Condensed intermediates. The changes made by them are being contemplated from this Financial Statement.
The consolidated financial statements include the Bank and its subsidiaries indicated in Note 2.b.1 and investment funds in Note 2.b.3, where Santander Conglomerate companies are the main beneficiaries or holders of the main obligations. The portfolios of these investment funds are classified by type of operation and are distributed in the same categories in which they were originally allocated.
All the relevant information related to Banco Santander's financial statements, and only them, are being evidenced, and correspond to those used by Banco Santander´s management.
During the preparation of the consolidated financial statements the information regarding equity in subsidiaries, significant receivable and payable balances, revenues and expenses arising from transactions between domestic branches, foreign branches and subsidiaries, unrealized profits between these entities and non-controlling stockholders participation are stated separately in stockholders’ equity and in the income statements.
Leasing operations have been reclassified in order to reflect its financial position according to the financial method.
The preparation of financial statements requires Management estimates that affect the reported amounts of assets and liabilities, disclosure of provision and contingent liabilities and the reported amounts of revenues and expenses for the reporting periods. Since Management’s judgment involves making estimates concerning the probability of future events, actual amounts could differ from those estimates. The main estimates are provision of allowance for loan losses, realization of the tax credit, contingent liabilities, pension plan and the fair value of financial assets.
The Board of Directors authorized the issuance of the Financial Statements of the exercise ended March 31, 2020 at the meeting held on April 27, 2020.
The consolidated interim financial statements based on international accounting standards issued by the International Accounting Standards Board (IASB) for the exercise ended on March 31, 2020 will be disclosed in a legal term, at the website www.santander.com.br/ri.
b) Affiliates, Subsidiaries and Jointly Controlled Entities
b.1) Affiliates and Subsidiaries - Scope of Consolidation
Quantity of Shares or Quotas Owned (in Thousands) | ||||||
Investments | Activity | Common Shares and Quotas | Preferred Shares | Direct Participation | Participation | |
Controlled by Banco Santander | ||||||
Santander Leasing S.A. Arrendamento Mercantil (Santander Leasing) | Leasing | 85 | - | 78.58% | 100.00% | |
Santander Brasil Administradora de Consórcio Ltda. (Santander Brasil Consórcio) | Buying Club | 238,886 | - | 100.00% | 100.00% | |
Banco Bandepe S.A. | Bank | 3,589 | - | 100.00% | 100.00% | |
Banco RCI Brasil S.A. | Bank | 81 | 81 | 39.89% | 39.89% | |
Aymoré Crédito, Financiamento e Investimento S.A. (Aymoré CFI) | Financial | 2,877 | - | 100.00% | 100.00% | |
Santander CCVM | Broker | 14,067,673 | 14,067,673 | 99.99% | 100.00% | |
Santander Corretora de Seguros, Investimentos e Serviços S.A. (Santander Corretora de Seguros) | Other Activities | 7,184 | - | 100.00% | 100.00% | |
Getnet S.A. (Note 2.c.i & 2.c.e) | Payment Institution | 69,565 | - | 100.00% | 100.00% | |
Sancap Investimentos e Participações S.A. (Sancap) | Holding | 23,538,159 | - | 100.00% | 100.00% | |
Santander Brasil EFC | Financial | 75 | - | 100.00% | 100.00% | |
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | Recovery of Defaulted Credits | 1,365,787 | - | 100.00% | 100.00% | |
Santander Holding Imobiliária S.A. (Note 2.c.h) | Holding | 354,645 | - | 100.00% | 100.00% | |
Santander Brasil Tecnologia S.A. | Tecnology | 45,371 | - | 100.00% | 100.00% | |
Rojo Entretenimento S.A. | Other Activities | 7,417 | - | 94.60% | 94.60% | |
BEN Benefícios e Serviços S.A. (BEN Benefícios) | Other Activities | 90,000 | - | 100.00% | 100.00% | |
Esfera Fidelidade S.A. | Other Activities | 10,001 | - | 100.00% | 100.00% | |
Super Pagamentos e Administração de Meios Eletrônicos S.A. (Super Pagamentos) (Nota 2.c.a & 2.c.f) | Payment Institution | - | - | - | - | |
Banco Olé Bonsucesso Consignado S.A. (Olé Consignado) (Nota 2.c.b & 2.c.f) | Bank | 435,599 | - | 60.00% | 100.00% | |
Bosan Participações S.A. (Nota 2.c.b) | Other Activities | 303,056 | 93,718 | 100.00% | 100.00% | |
Toque Fale Serviços de Telemarketing Ltda. (Toque Fale) (Nota 2.c.c) | Other Activities | 75,050 | - | 100.00% | 100.00% | |
Controlled by Aymoré CFI | ||||||
Banco PSA | Bank | 105 | - | - | 50.00% | |
Banco Hyundai Capital Brasil S.A. (Nota 2.c.j.1) | Bank | 150,000 | - | - | 50.00% | |
Controlled by Santander Leasing | ||||||
PI Distribuidora de Títulos e Valores Mobiliários S.A. | Leasing | 182 | - | - | 100.00% | |
Controlled by Sancap | ||||||
Santander Capitalização S.A. (Santander Capitalização) | Capitalization | 64,615 | - | - | 100.00% | |
Evidence Previdência S.A. | Private Pension | 42,819,564 | - | - | 100.00% | |
Controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | ||||||
Return Capital Serviços de Recuperação de Créditos S.A. (Nota 2.c.d) | Collection and Recover of Credit Management | 200 | - | - | 100.00% | |
Controlled by Return Capital Serviços de Recuperação de Créditos S.A. (current name of Ipanema Empreendimentos e Participações S.A.) | ||||||
Return Gestão de Recursos S.A. (atual denominação social da Gestora de Investimentos Ipanema S.A.) | Resources Management | 11 | - | - | 100.00% | |
Jointly Controlled Companies by Sancap | ||||||
Santander Auto S.A. (Nota 2.c.g) | Other Activities | 14,400 | - | - | 50.00% | |
Controlled by Getnet S.A | ||||||
Auttar HUT Processamento de Dados Ltda. (Auttar HUT) | Other Activities | 3,865 | - | - | 100.00% | |
b.2) Jointly Controlled - Equity Method
Quantity of Shares or Quotas Owned (in Thousands) | ||||||
Investments | Activity | Common Shares and Quotas | Preferred Shares | Direct Participation | Participation | |
Jointly Controlled Companies by Banco Santander | ||||||
Norchem Participações e Consultoria S.A. (Norchem Participações) | Other Activities | 950 | - | 50.00% | 50.00% | |
Estruturadora Brasileira de Projetos S.A. - EBP (EBP) | Other Activities | 3,859 | 2,953 | 11.11% | 11.11% | |
Gestora de Inteligência de Crédito S.A. (Gestora de Crédito) | Credit Bureau | 3,560 | 3,560 | 20.00% | 20.00% | |
Campo Grande Empreendimentos Ltda. | Other Activities | 255 | - | 25.32% | 25.32% | |
Jointly Controlled Companies by Santander Corretora de Seguros | ||||||
Webmotors S.A. | Other Activities | 366,182,676 | - | - | 70.00% | |
TecBan - Tecnologia Bancária S.A. (TecBan) | Other Activities | 743,944 | 68,771 | - | 18.98% | |
PSA Corretora de Seguros e Serviços Ltda. (PSA Corretora de Seguros) | Insurance Broker | 450 | - | - | 50.00% | |
Hyundai Corretora de Seguros Ltda. (Nota 2.c.j.2) | Insurance Broker | 1,000 | - | - | 50.00% | |
Controlled by Webmotors S.A. | ||||||
Loop Gestão de Pátios S.A. (Loop) | Other Activities | 23,243 | - | - | 51.00% | |
Controlled by TecBan | ||||||
Tbnet Comércio, Locação e Administração Ltda. (Tbnet) | Other Activities | 532,426 | - | - | 18.98% | |
Controlled by Tebnet | ||||||
Tbforte Segurança e Transporte de Valores Ltda. (Tbforte) | Other Activities | 517,505 | - | - | 18.98% | |
Controlled by Olé Consignado | ||||||
Crediperto Promotora de Vendas e Cobrança Ltda. | Other Activities | 6,950 | - | - | 100.00% | |
Olé Tecnologia Ltda. | Other Activities | 450 | - | - | 100.00% | |
Affiliate of Banco Santander | ||||||
Norchem Holdings e Negócios S.A. (Norchem Holdings) | Other Activities | 1,679 | - | 29.00% | 29.00% | |
b.3) Investment Funds Consolidated
· Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior (Santander FI Amazonas);
· Santander Fundo de Investimento Diamantina Multimercado Crédito Privado de Investimento no Exterior (Santander FI Diamantina);
· Santander Fundo de Investimento Guarujá Multimercado Crédito Privado de Investimento no Exterior (Santander FI Guarujá);
· Santander Fundo de Investimento Unix Multimercado Crédito Privado (Santander FI Unix);
· Santander Fundo de Investimento SBAC Referenciado DI Crédito Privado (Santander FI SBAC);
· Santander Paraty QIF PLC (Santander Paraty) (4);
· Venda de Veículos Fundo de Investimento em Direitos Creditórios (Venda de Veículos FIDC) (1);
· Fundo de Investimento em Direitos Creditórios RN Brasil - Financiamento de Veículos (FI RN Brasil - Financiamento de Veículos) (2);
· Prime 16 – Fundo de Investimento Imobiliário (atual denominação do BRL V - Fundo de Investimento Imobiliário - FII) (3);
· Santander FI Hedge Strategies Fund (Santander FI Hedge Strategies) (4);
· Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema VI - Não Padronizado (Fundo Investimento Ipanema NPL VI) (5);
· Fundo de Investimento em Direitos Creditórios Multisegmentos NPL Ipanema V - Não Padronizado (Fundo Investimento Ipanema NPL V);
· Santander Hermes Multimercado Crédito Privado Infraestrutura Fundo de Investimentos; and
· Fundo de Investimentos em Direitos Creditórios Atacado – Não Padronizado (6).
(1) The carmaker Renault (not belonging to the Conglomerate Santander) sells its trade receivables to the Fund. This Fund buys only trade receivables from Renault carmaker. In turn, the Banco RCI Brasil S.A. (Note 2.b.1) owns 100% of its subordinated shares.
(2) Banco RCI Brasil S.A. sold receivables (CDC portfolio) to FI RN Brasil – Financiamento de Veículos. The senior shares will have only one investor. Banco RCI Brasil S.A. holds 100% of subordinated shares.
(3) Banco Santander was a creditor for certain overdue credit operations that had real estate as collateral. The operation for the recovery of these credits consists of the contribution of properties as collateral to the capital of the Real Estate Investment Fund and the consequent transfer of the Fund's quotas to Banco Santander, by means of a payment in payment of the aforementioned credit operations.
(4) Banco Santander, through its subsidiaries, holds the risks and benefits of Santander Paraty and the Santander FI Hedge Strategies Subfund, resident in Ireland, and both are fully consolidated in its Consolidated Financial Statements. In the Irish market, an investment fund can not act directly and, for that reason, it was necessary to create another structure (a sub-fund), Santander FI Hedge Strategies. Santander Paraty does not have a financial position, and all position is derived from the financial position of Santander FI Hedge Strategies.
(5) Refers to a structure in which Banco Santander sold certain credit operations, which had already been transferred to losses (operations overdue for more than 360 days) to this fund. Atual Serviços de Recuperação de Creditos e Meios Digitais S.A. (current corporate name of Atual Companhia Securitizadora de Creditos Financeiros) (Note 2.b.1), a company controlled by Banco Santander, holds 100% of the shares in this fund.
(6) This fund started to be consolidated in June 2019 and is indirectly controlled by Atual Serviços de Recuperação de Créditos e Meios Digitais S.A.
Corporate Restructuring
Several social movements were implemented in order to reorganize the operations and activities of entities according to the business plan of the Conglomerate Santander.
a) Disposal of the equity interest held in Super Payments and Administration of Means of Electronic Media S.A.
On February 28, 2020, the sale to Superdigital Holding Company, SL of a company indirectly controlled by Banco Santander, SA, of the shares representing the entire share capital of Super Payments and Administração de Meios Eletrônico SA (“Superdigital”) for the amount R$270 million. As a result, the Company is no longer a shareholder of Superdigital.
b) Put option of equity interest in Banco Olé Bonsucesso Consignado S.A.
On March 14, 2019, the minority shareholder of Banco Olé Bonsucesso Consignado S.A. (Olé Consignado) formalized its interest to exercise the put option right provided in the Investment Agreement, executed on July 30, 2014, to sell its 40% equity interest in the capital stock of Olé Consignado to Banco Santander (Brazil) S.A. (“Banco Santander”).
On December 20, 2019, the parties entered into a binding agreement for the acquisition, by Banco Santander, of the all the shares issued by Bosan Participações S.A. (holding company whose only asset are shares representing 40% of the capital of Banco Olé), for the total amount of R$1.6 billion (“Operation”), to be paid on the closing date of the Operation.
On January 31, 2020, the Company and the shareholders of Bosan Participações SA (“Bosan”) concluded the definitive agreement and signed the purchase and sale agreement for 100% of the shares issued by Bosan, through the transfer of Bosan's shares to Company and payment to sellers in the total amount of R$1,608,772,783.47. As a result, Banco Santander became, directly and indirectly, the holder of 100% of Banco Olé's shares.
c) Acquisition of direct equity interest in Toque Fale Serviços de Telemarketing LTDA.
On March 24, 2020, the Company acquired shares representing the total share capital of Toque Fale Serviços de Telemarketing LTDA (“Toque Fale”) for the amount of R$1,099,854.72, corresponding to the equity value of the quotas on February 29, 2020, previously held by Getnet Adquirência e Serviços para Means of Payment SA and Auttar HUT Processamento de Dados LTDA. As a result, the Company became a direct shareholder of Toque Fale and holder of 100% of its capital.
d) Acquisition of residual equity interest in Return Capital Serviços e Recuperação de Crédito S.A.
On November 1, 2019, Atual Serviços de Recuperação de Creditos e Meios Digitais SA (“Atual”), wholly owned subsidiary of Banco Santander, and the minority shareholders of Return Capital Serviços e Recuperação de Crédito SA (“Return Capital”) celebrated Return Capital Stock Purchase and Sale Agreement, in which Atual acquired all the shares of minority shareholders, corresponding to 30% of Return Capital's share capital. The acquisition was completed on November 1, 2019, so Atual now holds 100% of the shares representing Return Capital's share capital.
e) Transfer of Control of Banco Olé Bonsucesso Consignado S.A. and Super Pagamentos e Administração de Meios Eletrônicos S.A.
On October, 23 2019, Aymoré Crédito, Financiamento e Investimento S.A. (“Aymoré”) had its capital stock reduced, without cancellation of shares, through the transfer of the common shares representing its equity held in Banco Olé Bonsucesso Consignado S.A. (“Olé”) and Super Pagamentos e Administração de Meios Eletrônicos S.A. (“Super”) to Banco Santander. On December 23, 2019 all the prior conditions for the capital stock reduction were accomplished: (i) previous authorization by Bacen; and (ii) term of opposition of the company creditors established as per art. 174 of Law 6.404/76; and, thus, Olé and Super become directly controlled by Banco Santander.
f) Acquisition of residual equity interest in Getnet S.A.
On December 19, 2018, Banco Santander and the Minority shareholders of Getnet S.A. executed an amendment to the Shares’ Sale and Purchase Agreement and Other Covenants of Getnet S.A., in which Banco Santander committed to acquire all of the Minority shareholders’ shares, corresponding to 11.5% of Getnet S.A. capital stock, per the amount of R$1,431,000. The acquisition was approved by BACEN on February 18, 2019 and closed on February 25, 2019. As a consequence Banco Santander has become the holder of 100% of the shares representatives of the capital stock of Getnet S.A.
g) Formation of Santander Auto S.A.
On January 9, 2019, SUSEP granted to Santander Auto S.A. the authorization to operate insurance throughout national territory. Santander Auto S.A. started its operations on August 2019.
h) Formation of partnership with Hyundai Capital Services Inc.
h.1) Banco Hyundai Capital Brasil S.A.
On February 21, 2019, the authorization to operate granted by BACEN for the functioning of Banco Hyundai was published in the Federal Official Gazette. Banco Hyundai began operations in April 2019.
h.2) Hyundai Corretora de Seguros Ltda.
On April 30, 2019, BACEN authorized Banco Santander to hold an indirect interest in a company to be incorporated under the name Hyundai Corretora de Seguros Ltda. (“Hyundai Corretora”). Hyundai Corretora was incorporated on July 22, 2019. On September 10, 2019 the company got the registration of the company as insurance brokerage with SUSEP. Hyundai Corretora began operations in November 2019.
3. Significant Accounting Policies
There was no change in the accounting practices and policies adopted by the Bank for the base date of March 31, 2020. These practices are described in note 3 of the Parent Company and Consolidated Condensed Financial Statements of December 31, 2019.
Resolution nº. 4,782 of March 16, 2020, subsequently amended by Resolution nº. 4,791 of March 26, 2020, which came into force as of its publication date, determines that in cases of restructuring of credit operations carried out up to 30 As of September 2020, the restructuring is no longer an indicator for considering problematic assets. In case this classification has already been made considering exclusively the restructuring characteristic, the risk exposure as a problematic asset can be reversed. The Resolution determines that this rule does not apply to operations that were already classified as problematic on the date of publication of the Resolution and operations that present evidence that they will not be honored in the new conditions.
Resolution nº. 4,803 of April 9, 2020, which came into force as of its publication date and allows operations renegotiated in the period from March 1 to September 30, 2020 to be reclassified to the level at which they were classified on the day February 29, 2020, except for operations that on February 29, 2020 had a delay equal to or greater than fifteen days in the payment of the installment of principal or charges and operations that show evidence that they will not be honored in the new conditions.
Resolution No. 4,797 published on April 6, 2020, which becomes effective as of its publication, determines that financial institutions and other institutions authorized to operate by the Central Bank of Brazil are prevented from:
(i) pay interest on own capital and dividends above the mandatory minimum established in the bylaws;
(ii) repurchase own shares (it will only be allowed if through stock exchanges or an organized over-the-counter market, up to the limit of 5% (five percent) of the shares issued, including the shares recorded in treasury at the entry into force of this Resolution ;
(iii) reduce the share capital, when legally possible;
(iv) increase any remuneration, fixed or variable, for directors and members of the board of directors, in the case of public limited companies, and of directors, in the case of limited companies;
(v) anticipate the payment of any of the previous items.
The prohibitions are applicable to payments and advances based on the results obtained, and/or to be carried out, the date of publication of the Resolution and September 30, 2020 and must be observed regardless of the maintenance of resources in an amount higher than the Additional Principal Capital (ACP), dealt with in Resolutions 4,193, of March 1, 2013, and 4,783, of March 16, 2020.
4. Cash and Cash Equivalents
Bank | ||||||||
3/31/2020 | 31/12/2019 | 3/31/2019 | 12/31/2018 | |||||
Cash | 12,705,433 | 9,543,649 | 9,278,518 | 11,358,459 | ||||
Interbank Investments | 17,809,809 | 11,877,783 | 8,465,804 | 14,496,489 | ||||
Money Market Investments | 6,903,506 | 110,746 | 5,686,619 | 4,925,769 | ||||
Interbank Deposits | 1,938,367 | 1,465,065 | 632,858 | 1,702,653 | ||||
Foreign Currency Investments | 8,967,936 | 10,301,972 | 2,146,327 | 7,868,067 | ||||
Total | 30,515,242 | 21,421,432 | 17,744,322 | 25,854,948 | ||||
Consolidated | ||||||||
3/31/2020 | 31/12/2019 | 3/31/2019 | 12/31/2018 | |||||
Cash | 13,962,809 | 9,924,644 | 9,516,113 | 11,629,112 | ||||
Interbank Investments | 16,942,563 | 11,519,019 | 8,379,945 | 13,656,870 | ||||
Money Market Investments | 6,903,506 | 110,746 | 5,686,619 | 4,925,769 | ||||
Interbank Deposits | 1,070,271 | 1,105,446 | 546,141 | 862,449 | ||||
Foreign Currency Investments | 8,968,786 | 10,302,827 | 2,147,185 | 7,868,652 | ||||
Total | 30,905,372 | 21,443,663 | 17,896,058 | 25,285,982 |
5. Interbank Investments
Bank | ||||||||||
3/31/2020 | 12/31/2019 | |||||||||
Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | ||||||
Money Market Investments | 30,279,108 | 10,812,059 | - | 41,091,167 | 28,703,365 | |||||
Own Portfolio | 4,351,060 | - | - | 4,351,060 | 821,425 | |||||
Financial Treasury Bills - LFT | 823,283 | - | - | 823,283 | 10,500 | |||||
National Treasury Bills - LTN | 1,678,690 | - | - | 1,678,690 | - | |||||
National Treasury Notes - NTN | 1,849,087 | - | - | 1,849,087 | 810,925 | |||||
Third-party Portfolio | 5,910,047 | 5,802,926 | - | 11,712,973 | 9,011,703 | |||||
National Treasury Bills - LTN | 1,162,057 | 105,224 | - | 1,267,281 | 457,427 | |||||
National Treasury Notes - NTN | 4,747,990 | 5,697,702 | - | 10,445,692 | 8,554,276 | |||||
Sold Position | 20,018,001 | 5,009,133 | - | 25,027,134 | 18,870,237 | |||||
National Treasury Bills - LTN | 2,422,405 | - | - | 2,422,405 | 2,906,634 | |||||
National Treasury Notes - NTN | 17,595,596 | 5,009,133 | - | 22,604,729 | 15,963,603 | |||||
Interbank Deposits | 12,220,875 | 42,412,160 | 35,934,908 | 90,567,943 | 76,924,193 | |||||
Foreign Currency Investments | 8,967,936 | - | - | 8,967,936 | 10,301,972 | |||||
Total | 51,467,919 | 53,224,219 | 35,934,908 | 140,627,046 | 115,929,530 | |||||
Consolidated | ||||||||||
3/31/2020 | 12/31/2019 | |||||||||
Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | ||||||
Money Market Investments | 30,087,505 | 10,812,059 | - | 40,899,564 | 28,703,365 | |||||
Own Portfolio | 4,159,457 | - | - | 4,159,457 | 821,425 | |||||
Financial Treasury Bills - LFT | 746,028 | - | - | 746,028 | 10,500 | |||||
National Treasury Bills - LTN | 1,564,343 | - | - | 1,564,343 | - | |||||
National Treasury Notes - NTN | 1,849,086 | - | - | 1,849,086 | 810,925 | |||||
Third-party Portfolio | 5,910,047 | 5,802,926 | - | 11,712,973 | 9,011,703 | |||||
National Treasury Bills - LTN | 1,162,057 | 105,224 | - | 1,267,281 | 457,427 | |||||
National Treasury Notes - NTN | 4,747,990 | 5,697,702 | - | 10,445,692 | 8,554,276 | |||||
Sold Position | 20,018,001 | 5,009,133 | - | 25,027,134 | 18,870,237 | |||||
National Treasury Bills - LTN | 2,422,405 | - | - | 2,422,405 | 2,906,634 | |||||
National Treasury Notes - NTN | 17,595,596 | 5,009,133 | - | 22,604,729 | 15,963,603 | |||||
Interbank Deposits | 1,105,945 | 3,728,355 | 864,894 | 5,699,194 | 4,361,302 | |||||
Foreign Currency Investments | 8,968,786 | - | - | 8,968,786 | 10,302,827 | |||||
Total | 40,162,236 | 14,540,414 | 864,894 | 55,567,544 | 43,367,494 |
6. Securities and Derivatives Financial Instruments
a) Securities
I) By Category
Bank | Consolidated | |||||||||||||||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||||||||||||||
Effect of Adjustment to Fair Value on: | Effect of Adjustment to Fair Value on: | |||||||||||||||||||
Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | |||||||||||
Trading Securities | 52,251,174 | (608,290) | - | 51,642,884 | 32,557,896 | 59,297,817 | (756,315) | - | 58,541,503 | 35,977,471 | ||||||||||
Government Securities | 51,592,714 | (583,676) | - | 51,009,038 | 30,755,634 | 57,095,655 | (731,701) | - | 56,363,955 | 33,158,573 | ||||||||||
Private Securities | 658,460 | (24,614) | - | 633,846 | 1,802,262 | 2,202,162 | (24,614) | - | 2,177,548 | 2,818,898 | ||||||||||
Available-for-Sale Securities | 121,742,997 | 2,727,762 | 2,641,591 | 127,112,350 | 118,471,594 | 127,932,428 | 2,727,762 | 2,802,902 | 133,463,093 | 128,296,459 | ||||||||||
Government Securities | 93,698,491 | 2,670,754 | 2,285,874 | 98,655,120 | 89,526,633 | 100,390,257 | 2,670,754 | 2,447,186 | 105,508,197 | 98,943,695 | ||||||||||
Private Securities | 28,044,506 | 57,008 | 355,716 | 28,457,230 | 28,944,961 | 27,542,171 | 57,008 | 355,716 | 27,954,896 | 29,352,764 | ||||||||||
Held-to-Maturity Securities | 14,841,698 | - | - | 14,841,698 | 11,739,597 | 14,388,657 | - | - | 14,388,657 | 11,739,597 | ||||||||||
Government Securities | 14,388,657 | - | - | 14,388,657 | 11,275,488 | 14,388,657 | - | - | 14,388,657 | 11,275,488 | ||||||||||
Private Securities | 453,041 | - | - | 453,041 | 464,109 | 453,041 | - | - | 453,041 | 464,109 | ||||||||||
Total Securities | 188,835,869 | 2,119,472 | 2,641,591 | 193,596,923 | 162,769,087 | 201,618,902 | 1,971,448 | 2,802,902 | 206,393,252 | 176,013,527 | ||||||||||
II) Trading Securities
Bank | ||||||||||||||||||||
03/31/2020 | 12/31/2019 | By Maturity | 03/31/2020 | |||||||||||||||||
Trading Securities | Amortized Cost | Adjustment to Fair Value - Income | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | ||||||||||
Government Securities | 51,592,714 | (583,676) | 51,009,038 | 30,755,634 | - | 3,813,955 | 10,329,779 | 14,347,882 | 22,517,422 | 51,009,038 | ||||||||||
Financial Treasury Bills - LFT | 5,385,777 | 530 | 5,386,307 | 3,158,889 | - | - | 4,803,176 | 309,619 | 273,512 | 5,386,307 | ||||||||||
National Treasury Bills - LTN | 8,718,643 | 31,714 | 8,750,357 | 6,838,515 | - | 3,662,789 | 1,711,590 | 1,694,218 | 1,681,760 | 8,750,357 | ||||||||||
National Treasury Notes - NTN | 36,784,187 | (627,275) | 36,156,912 | 20,687,308 | - | 147,353 | 3,787,885 | 11,703,080 | 20,518,594 | 36,156,912 | ||||||||||
Agricultural Debt Securities - TDA | 56,078 | 4,254 | 60,331 | 70,922 | - | 3,833 | 27,127 | 14,784 | 14,587 | 60,331 | ||||||||||
Brazilian Foreign Debt Notes | 618,179 | 7,908 | 626,087 | - | - | - | - | 626,087 | - | 626,087 | ||||||||||
Debentures | 29,850 | (806) | 29,044 | - | - | (19) | - | 93 | 28,970 | 29,044 | ||||||||||
Private Securities | 658,460 | (24,614) | 633,846 | 1,802,262 | 218,055 | 21,832 | 19,538 | 70,011 | 304,409 | 633,846 | ||||||||||
Shares | 1 | (1) | 0 | - | 0 | - | - | - | - | 0 | ||||||||||
Investment Fund Shares | 222,903 | (4,848) | 218,055 | 834,063 | 218,055 | - | - | - | - | 218,055 | ||||||||||
Debentures | 299,353 | (15,130) | 284,223 | 439,819 | - | 13,287 | 16,180 | 27,855 | 226,901 | 284,223 | ||||||||||
Eurobonds | - | - | - | 492,774 | - | - | - | - | - | - | ||||||||||
Certificates of Real Estate Receivables - CRI | 18,639 | (517) | 18,122 | 22,869 | - | (5) | (58) | 3,034 | 15,151 | 18,122 | ||||||||||
Certificates of Agribusiness Receivables - CRA | 117,564 | (4,118) | 113,446 | 12,737 | - | 8,550 | 3,416 | 39,123 | 62,356 | 113,446 | ||||||||||
Total | 52,251,174 | (608,290) | 51,642,884 | 32,557,896 | 218,055 | 3,835,788 | 10,349,318 | 14,417,893 | 22,821,830 | 51,642,884 | ||||||||||
Consolidated | ||||||||||||||||||||
03/31/2020 | 12/31/2019 | By Maturity | 03/31/2020 | |||||||||||||||||
Trading Securities | Amortized Cost | Adjustment to Fair Value - Income | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | ||||||||||
Government Securities | 57,095,655 | (731,701) | 56,363,955 | 33,158,573 | (45,214) | 3,813,955 | 10,901,591 | 17,396,443 | 24,297,180 | 56,363,955 | ||||||||||
Financial Treasury Bills - LFT | 8,882,273 | 541 | 8,882,814 | 3,530,356 | - | - | 5,374,988 | 3,233,258 | 274,568 | 8,882,814 | ||||||||||
National Treasury Bills - LTN | 8,718,643 | 31,714 | 8,750,357 | 6,838,515 | - | 3,662,789 | 1,711,590 | 1,694,218 | 1,681,760 | 8,750,357 | ||||||||||
National Treasury Notes - NTN | 38,790,632 | (775,311) | 38,015,321 | 22,718,780 | (45,214) | 147,353 | 3,787,885 | 11,828,002 | 22,297,296 | 38,015,321 | ||||||||||
Agricultural Debt Securities - TDA | 56,078 | 4,254 | 60,331 | 70,922 | - | 3,833 | 27,127 | 14,784 | 14,587 | 60,331 | ||||||||||
Brazilian Foreign Debt Notes | 618,179 | 7,908 | 626,087 | - | - | - | - | 626,087 | - | 626,087 | ||||||||||
Debentures | 29,850 | (806) | 29,044 | - | - | (19) | - | 93 | 28,970 | 29,044 | ||||||||||
Private Securities | 2,202,162 | (24,614) | 2,177,548 | 2,818,898 | 205,486 | 21,832 | 19,538 | 102,073 | 1,828,618 | 2,177,548 | ||||||||||
Shares | 337,657 | (1) | 337,656 | 665,075 | 337,656 | - | - | - | - | 337,656 | ||||||||||
Investment Fund Real Estate | 416,268 | (4,848) | 411,420 | 1,068,068 | 411,420 | - | - | - | - | 411,420 | ||||||||||
Investment Fund Shares | (207,173) | - | (207,173) | 36,067 | (207,173) | - | - | - | - | (207,173) | ||||||||||
Debentures | 1,487,146 | (15,130) | 1,472,016 | 439,819 | (336,416) | 13,287 | 16,180 | 27,855 | 1,751,110 | 1,472,016 | ||||||||||
Eurobonds | - | - | - | 492,774 | - | - | - | - | - | - | ||||||||||
Certificates of Real Estate Receivables - CRI | 18,639 | (517) | 18,122 | 22,869 | - | (5) | (58) | 3,034 | 15,151 | 18,122 | ||||||||||
Certificates of Agribusiness Receivables - CRA | 117,564 | (4,118) | 113,446 | 12,737 | - | 8,550 | 3,416 | 39,123 | 62,356 | 113,446 | ||||||||||
Bill of Exchange | 32,062 | - | 32,062 | 81,489 | - | - | - | 32,062 | - | 32,062 | ||||||||||
Total | 59,297,817 | (756,315) | 58,541,503 | 35,977,471 | 160,272 | 3,835,788 | 10,921,129 | 17,498,516 | 26,125,798 | 58,541,503 | ||||||||||
III) Available-for-Sale Securities
Bank | ||||||||||||||||||||||
03/31/2020 | 12/31/2019 | By Maturity | 03/31/2020 | |||||||||||||||||||
Effect of Adjustment to Fair Value on: | ||||||||||||||||||||||
Available-for-Sale Securities | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | |||||||||||
Government Securities | 93,698,491 | 2,670,754 | 2,285,874 | 98,655,120 | 89,526,633 | - | 29,564 | 17,089,016 | 30,593,817 | 50,942,722 | 98,655,120 | |||||||||||
Treasury Certificates - CFT | 1,013 | - | 154 | 1,167 | 1,165 | - | - | - | 1,167 | - | 1,167 | |||||||||||
Securitized Credit | 726 | - | 40 | 766 | - | - | 128 | 403 | 235 | 0 | 766 | |||||||||||
Financial Treasury Bills - LFT | 16,093,273 | - | 3,789 | 16,097,063 | 11,151,613 | - | - | 3,155,820 | 6,891,748 | 6,049,495 | 16,097,063 | |||||||||||
National Treasury Bills - LTN | 32,037,439 | 826,334 | (28,501) | 32,835,272 | 30,984,931 | - | - | 8,678,317 | 14,168,141 | 9,988,814 | 32,835,272 | |||||||||||
National Treasury Notes - NTN | 43,286,634 | 1,844,420 | 2,262,668 | 47,393,722 | 47,388,924 | - | 29,436 | 3,446,502 | 9,013,371 | 34,904,412 | 47,393,722 | |||||||||||
Mexican Foreign Debt Bonds | 1,759,488 | - | 48,487 | 1,807,975 | - | - | - | 1,807,975 | - | - | 1,807,975 | |||||||||||
Bond Treasury | 519,918 | - | (763) | 519,155 | - | - | - | - | 519,155 | - | 519,155 | |||||||||||
Private Securities | 28,044,506 | 57,008 | 355,716 | 28,457,230 | 28,944,961 | 2,307,980 | 1,701,854 | 4,105,352 | 11,996,668 | 8,345,376 | 28,457,230 | |||||||||||
Shares | 320 | - | (268) | 52 | 60 | 52 | - | - | - | - | 52 | |||||||||||
Investment Funds | 2,314,755 | - | (9,192) | 2,305,563 | 3,963,540 | 2,305,563 | - | - | - | - | 2,305,563 | |||||||||||
Debentures (1) | 11,956,600 | 55,052 | 288,025 | 12,299,677 | 11,915,052 | 2,365 | 633,381 | 1,055,622 | 3,130,120 | 7,478,189 | 12,299,677 | |||||||||||
Eurobonds | 3,136,454 | - | 33,857 | 3,170,311 | 3,311,195 | - | - | - | 3,170,311 | - | 3,170,311 | |||||||||||
Promissory Notes - NP | 4,445,570 | 1,956 | 11,060 | 4,458,587 | 4,696,855 | - | 117,652 | 618,214 | 3,683,430 | 39,290 | 4,458,587 | |||||||||||
Financial Bills - LF | 447,514 | - | 3,269 | 450,783 | 192,804 | - | - | 194,615 | 256,168 | - | 450,783 | |||||||||||
Certificates of Real Estate Receivables - CRI | 19,722 | - | 345 | 20,067 | 36,680 | - | - | 16,320 | - | 3,747 | 20,067 | |||||||||||
Rural Product Note - CPR | 5,723,571 | - | 28,620 | 5,752,191 | 4,828,775 | - | 950,820 | 2,220,581 | 1,756,639 | 824,150 | 5,752,191 | |||||||||||
Total | 121,742,997 | 2,727,762 | 2,641,591 | 127,112,350 | 118,471,594 | 2,307,980 | 1,731,418 | 21,194,368 | 42,590,485 | 59,288,099 | 127,112,350 | |||||||||||
Consolidated | ||||||||||||||||||||||
03/31/2020 | 12/31/2019 | By Maturity | 03/31/2020 | |||||||||||||||||||
Effect of Adjustment to Fair Value on: | ||||||||||||||||||||||
Available-for-Sale Securities | Amortized Cost | Income | Equity | Carrying Amount | Carrying Amount | Without Maturity | Up to 3 Months | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | Total | |||||||||||
Government Securities | 100,390,257 | - | 2,670,754 | - | 2,447,186 | - | 105,508,197 | - | 98,943,695 | - | 29,564 | 19,785,351 | 33,071,079 | 52,622,202 | 105,508,197 | |||||||
Treasury Certificates - CFT | 1,013 | - | 154 | 1,167 | 1,165 | - | - | - | 1,167 | - | 1,167 | |||||||||||
Securitized Credit | 726 | - | 40 | 766 | - | - | 128 | 403 | 235 | 0 | 766 | |||||||||||
Financial Treasury Bills - LFT | 18,766,912 | - | 3,829 | 18,770,740 | 16,547,365 | - | - | 4,065,425 | 8,413,569 | 6,291,747 | 18,770,740 | |||||||||||
National Treasury Bills - LTN | 33,529,467 | 826,334 | 34,645 | 34,390,445 | 32,500,648 | - | - | 8,678,317 | 14,840,527 | 10,871,601 | 34,390,445 | |||||||||||
National Treasury Notes - NTN | 45,812,734 | 1,844,420 | 2,360,794 | 50,017,948 | 49,894,517 | - | 29,436 | 5,233,232 | 9,296,426 | 35,458,854 | 50,017,948 | |||||||||||
Mexican Foreign Debt Bonds | 1,759,488 | - | 48,487 | 1,807,975 | - | - | - | 1,807,975 | - | - | 1,807,975 | |||||||||||
Bond Treasury | 519,918 | - | (763) | 519,155 | - | - | - | - | 519,155 | - | 519,155 | |||||||||||
Spanish Foreign Debt Bonds | 27,542,171 | 57,008 | 355,716 | 27,954,896 | 29,352,764 | 1,805,645 | 1,701,854 | 4,105,352 | 11,996,668 | 8,345,376 | 27,954,896 | |||||||||||
Private Securities | 23,459 | - | (268) | 23,191 | 82,387 | 23,191 | - | - | - | - | 23,191 | |||||||||||
Shares | - | - | - | - | - | - | - | - | - | - | - | |||||||||||
Investment Fund Shares in Participation - FIP | 1,745,050 | - | (9,192) | 1,735,858 | 3,082,832 | 1,735,858 | - | - | - | - | 1,735,858 | |||||||||||
Investment Fund Shares | 39,162 | - | - | 39,162 | 57,531 | 39,162 | - | - | - | - | 39,162 | |||||||||||
Investment Fund Real Estate | 11,956,600 | 55,052 | 288,025 | 12,299,677 | 13,063,691 | 2,365 | 633,381 | 1,055,622 | 3,130,120 | 7,478,189 | 12,299,677 | |||||||||||
Debentures | 3,136,454 | - | 33,857 | 3,170,311 | 3,311,195 | - | - | - | 3,170,311 | - | 3,170,311 | |||||||||||
Eurobonds | 4,445,570 | 1,956 | 11,060 | 4,458,587 | 4,696,855 | - | 117,652 | 618,214 | 3,683,430 | 39,290 | 4,458,587 | |||||||||||
Promissory Notes - NP | 447,514 | - | 3,269 | 450,783 | 192,804 | - | - | 194,615 | 256,168 | - | 450,783 | |||||||||||
Financial Bills - LF | 19,722 | - | 345 | 20,067 | 36,680 | - | - | 16,320 | - | 3,747 | 20,067 | |||||||||||
Certificates of Real Estate Receivables - CRI | 5,069 | - | - | 5,069 | 14 | 5,069 | - | - | - | - | 5,069 | |||||||||||
Certificates of Time Deposits - CDB | 5,723,571 | - | 28,620 | 5,752,191 | 4,828,775 | - | 950,820 | 2,220,581 | 1,756,639 | 824,150 | 5,752,191 | |||||||||||
Rural Product Note - CPR | 127,932,428 | 2,727,762 | 2,802,902 | 133,463,093 | 128,296,459 | 1,805,645 | 1,731,418 | 23,890,703 | 45,067,747 | 60,967,579 | 133,463,093 | |||||||||||
Total | - | - | - | - | - | - | - | - | - | - | - | |||||||||||
(1) In the Bank and Consolidated, includes securities issued by mixed-capital companies and R$267,796 (12/31/2019 - R$262,027) securities available for sale.
(2) On March 31, 2020, the quantite of 1,400,000 in the amount of R$1,612,932 (12/31/2019 – 1,140,000 in the amount of R$1,229,297) of National Treasury Notes - NTN, are linked to the obligation assumed by Banco Santander to cover the reserves to be amortized under Plan V of the Social Security Fund (Banesprev).
IV) Held-to-Maturity Securities
Bank/Consolidated | ||||||||||||||
By Maturity | 03/31/2020 | |||||||||||||
Amortized Cost | From 3 to 12 Months | From 1 to 3 Years | Over 3 Years | |||||||||||
Held-to-Maturity Securities (1) | 03/31/2020 | 12/31/2019 | Total | |||||||||||
Government Securities | 14,388,657 | 11,275,488 | 1,007,051 | 6,020,821 | 7,360,785 | 14,388,657 | ||||||||
National Treasury Notes - NTN | 4,321,347 | 3,414,897 | 25,586 | - | 4,295,761 | 4,321,347 | ||||||||
Brazilian Foreign Debt Bonds | 10,067,310 | 7,860,591 | 981,465 | 6,020,821 | 3,065,025 | 10,067,310 | ||||||||
Private Securities | 453,041 | 464,109 | 453,041 | - | - | 453,041 | ||||||||
Certificates of Agribusiness Receivables - CRA | 453,041 | 464,109 | 453,041 | - | - | 453,041 | ||||||||
Total | 14,841,698 | 11,739,597 | 1,460,092 | 6,020,821 | 7,360,785 | 14,841,698 | ||||||||
(1) The market value of held to maturity securities is R$16,883,894 (12/31/2019 - R$12,514,855).
For the quarter ended March 31, 2020, there were no disposals of federal government securities and other securities classified in the category of securities held to maturity.
Given the provisions of Article 5 of Circular Bacen 3,068/2001, Banco Santander has the financial capacity and intention to hold to maturity securities classified as held-to-maturity.
The market value of securities is estimated based on the average quotation on organized markets and their estimated cash flows, discounted to present value using the applicable interest rate curves, considered as representative of market conditions at the end of balance.
V) Financial Income - Securities Transactions
Bank | Consolidated | |||||||
01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | |||||
Income From Fixed-Income Securities (1) | 35,238,078 | 4,404,244 | 35,278,072 | 4,678,639 | ||||
Income From Interbank Investments | 3,100,839 | 2,220,160 | 2,223,104 | 1,125,857 | ||||
Income From Variable-Income Securities | (66,041) | 14,852 | (545,170) | (79,737) | ||||
Financial Income of Pension and Capitalization | - | - | 42,321 | 33,339 | ||||
Provision for Impairment Losses (2) | (7,194) | (54,854) | (7,194) | (54,854) | ||||
Others (3) | (2,601,377) | (133,349) | (2,609,499) | (147,325) | ||||
Total | 35,664,305 | 6,451,053 | 34,381,634 | 5,555,919 |
(1) Includes exchange variation revenue in the amount of R$31,191,979 in the Bank and in the Consolidated (2019 - revenue of R$473,791 in the Bank and in the Consolidated).
(2) Corresponds to the permanent loss record, referring to securities classified as available for sale.
(3) Includes the net valuation of investment fund shares and interest and exchange variation expenses in the amount of R$2,746,386 in the Bank and in the Consolidated (2019 - expense of R$144,262 in the Bank and in the Consolidated).
For the quarter ended March 31, 2020, the amount of 260,000 in the amount of R$1,272,505 of National Treasury Notes - NTN, was sold, with a net result of 240,135.
b) Derivatives Financial Instruments
The main risk factors associated to derivatives contracted are related to exchange rates, interest rates and stocks. To manage these and other market risk factors the Bank uses practices which include the measurement and follow up of the limit´s usage previously defined on internal committees, as well as the daily follow up of the portfolios values in risk, sensitivities and changes in the interest rate and exchange exposure, liquidity gaps, among other practices which allow the control and follow up on the main risk metrics that can affect the Bank´s position in the several markets which it acts. Based on this management model, the Bank has accomplished its goal, using operations with derivatives, in optimize the relation risk/benefits even in situation with great volatility.
The derivatives fair value is determined through quotation of market prices. The swaps contracts fair value is determined using discounted cash flow modeling techniques, reflecting suitable risk factors. The fair value of NDF and Future contracts are also determined based on the quotation of market prices for derivatives traded in specific chamber or using the same methodology applied for swap contracts. The fair value of options derivatives is determined based on the mathematical models, such as Black & Scholes, using yield rates, implied volatilities and the fair value of the corresponding asset. The current market prices are used to price the volatilities. For the derivatives which do not have prices directly disclosed by specific chamber, their fair values are obtained through pricing models which use market information, based on disclosed prices of more liquid assets. Interest rate curves and market volatilities are extracted from theses prices to be used as first input in these models.
I) Summary of Derivative Financial Instruments
Below, the composition of the Derivative Financial Instruments portfolio (Assets and Liabilities) by type of instrument, demonstrated by their market value:
Bank | Consolidated | |||||||||||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||
Swap - Differential Receivable | 15,767,461 | 18,532,669 | 8,620,854 | 10,167,632 | 22,482,639 | 26,008,412 | 14,625,237 | 16,701,678 | ||||||||
Options to Exercise Awards | 2,257,163 | 1,833,396 | 886,927 | 1,593,625 | 2,725,949 | 2,200,824 | 1,065,752 | 1,699,729 | ||||||||
Term Contract and Other Contracts | 14,530,563 | 13,067,835 | 1,678,454 | 2,221,955 | 6,775,981 | 5,226,843 | 1,750,151 | 2,221,955 | ||||||||
Total | 32,555,187 | 33,433,900 | 11,186,235 | 13,983,212 | 31,984,569 | 33,436,079 | 17,441,140 | 20,623,362 | ||||||||
II) Derivatives Recorded in Memorandum Accounts and Balance Sheets
Bank | ||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value | ||||||
Swap | (3,737,603) | (2,765,208) | (1,941,478) | (1,546,779) | ||||||||
Assets | 318,883,149 | 122,044,988 | 123,376,013 | 268,179,566 | 136,520,305 | 136,775,918 | ||||||
CDI (Interbank Deposit Rates) | 49,385,110 | 6,403,084 | 6,678,382 | 41,347,160 | 8,115,530 | 8,090,923 | ||||||
Fixed Interest Rate - Real | 52,817,146 | - | - | 41,538,831 | - | - | ||||||
Indexed to Price and Interest Rates | 5,353,954 | - | - | 3,173,180 | - | - | ||||||
Foreign Currency | 211,273,539 | 115,641,904 | 116,697,631 | 182,066,995 | 128,404,775 | 128,684,995 | ||||||
Others | 53,400 | - | - | 53,400 | - | - | ||||||
Liabilities | 322,620,752 | (125,782,591) | (126,141,221) | 270,121,044 | (138,461,783) | (138,322,697) | ||||||
CDI (Interbank Deposit Rates) | 42,982,026 | - | - | 33,231,630 | - | - | ||||||
Fixed Interest Rate - Real | 72,278,488 | (19,461,342) | (20,246,772) | 56,109,142 | (14,570,311) | (14,451,016) | ||||||
Indexed to Price and Interest Rates | 110,362,782 | (105,008,828) | (104,673,089) | 125,829,755 | (122,656,575) | (122,615,416) | ||||||
Foreign Currency | 95,631,635 | - | - | 53,662,220 | - | - | ||||||
Others | 1,365,821 | (1,312,421) | (1,221,360) | 1,288,297 | (1,234,897) | (1,256,265) | ||||||
Options | 856,077,306 | (211,554) | 423,767 | 1,446,691,036 | (713,536) | (706,698) | ||||||
Purchased Position | 366,144,885 | 468,765 | 2,257,163 | 678,193,200 | 641,223 | 886,927 | ||||||
Call Option - Foreign Currency | 284,795 | - | (14,535) | 223,478 | 1,318 | 35 | ||||||
Put Option - Foreign Currency | 508,772 | 64 | 9,291 | 1,508,664 | 474 | 4,865 | ||||||
Call Option - Other | 51,635,416 | 249,915 | 1,070,137 | 98,154,363 | 295,668 | 148,426 | ||||||
Interbank Market | 51,635,416 | 249,915 | 1,070,156 | 98,154,363 | 295,668 | 148,517 | ||||||
Others (2) | - | - | (19) | - | - | (91) | ||||||
Put Option - Other | 313,715,902 | 218,786 | 1,192,270 | 578,306,695 | 343,763 | 745,943 | ||||||
Interbank Market | 313,715,902 | 218,786 | 1,192,274 | 578,306,695 | 343,763 | 746,006 | ||||||
Others (2) | - | - | (4) | - | - | (63) | ||||||
Sold Position | 489,932,421 | (680,319) | (1,833,396) | 768,497,836 | (1,354,759) | (1,593,625) | ||||||
Call Option - Foreign Currency | 56,466 | - | (6,526) | 254,945 | (3,103) | (1,472) | ||||||
Put Option - Foreign Currency | 483,819 | (65) | (36,121) | 315,601 | (1,528) | (4,337) | ||||||
Call Option - Other | 108,435,760 | (251,381) | (559,924) | 174,166,802 | (562,827) | (441,032) | ||||||
Interbank Market | 108,435,760 | (251,381) | (559,924) | 174,166,802 | (562,827) | (440,959) | ||||||
Others (2) | - | - | - | - | - | (73) | ||||||
Put Option - Other | 380,956,376 | (428,873) | (1,230,825) | 593,760,488 | (787,301) | (1,159,126) | ||||||
Interbank Market | 380,956,376 | (428,873) | (1,230,825) | 593,760,488 | (787,301) | (1,159,038) | ||||||
Others (2) | - | - | - | - | - | (88) | ||||||
Futures Contracts | 427,652,348 | - | - | 432,564,399 | - | - | ||||||
Purchased Position | 124,081,696 | - | - | 72,332,140 | - | - | ||||||
Exchange Coupon (DDI) | 21,478,695 | - | - | 7,105,007 | - | - | ||||||
Interest Rates (DI1 and DIA) | 101,504,008 | - | - | 55,430,519 | - | - | ||||||
Foreign Currency | - | - | - | 9,781,856 | - | - | ||||||
Indexes (3) | 1,098,993 | - | - | - | - | - | ||||||
Treasury Bonds/Notes | - | - | - | 14,758 | - | - | ||||||
Sold Position | 303,570,652 | - | - | 360,232,259 | - | - | ||||||
Exchange Coupon (DDI) | 142,682,154 | - | - | 145,668,039 | - | - | ||||||
Interest Rates (DI1 and DIA) | 108,928,827 | - | - | 196,170,106 | - | - | ||||||
Foreign Currency | 49,522,991 | - | - | 17,208,599 | - | - | ||||||
Indexes (3) | 195,255 | - | - | 290,254 | - | - | ||||||
Treasury Bonds/Notes | 2,241,425 | - | - | 895,262 | - | - | ||||||
Forward Contracts and Others | 139,446,781 | 2,304,674 | 1,462,728 | 100,659,795 | (900,818) | (706,698) | ||||||
Purchased Commitment | 78,885,184 | 4,937,241 | 703,310 | 50,216,459 | (269,708) | 50,412 | ||||||
Currencies | 75,028,494 | 4,937,241 | 667,380 | 50,215,376 | (269,708) | 50,407 | ||||||
Others | 3,856,690 | - | 35,930 | 1,083 | - | 5 | ||||||
Sell Commitment | 60,561,597 | (2,632,567) | 759,418 | 49,298,439 | (631,110) | (593,914) | ||||||
Currencies | 58,923,133 | (2,632,567) | 758,972 | 49,294,662 | (631,085) | (594,002) | ||||||
Others | 1,638,464 | - | 446 | 3,777 | (25) | 88 |
Consolidated | ||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||
Trading | Notional (1) | Cost | Fair Value | Notional (1) | Cost | Fair Value | ||||||
Swap | 2,981,273 | (3,525,784) | (1,885,422) | (2,076,440) | ||||||||
Assets | 468,907,510 | 126,766,089 | 135,072,141 | 282,164,189 | 147,887,209 | 146,758,024 | ||||||
CDI (Interbank Deposit Rates) | 44,275,777 | 16,021,903 | 16,827,950 | 40,550,627 | 16,197,221 | 16,655,885 | ||||||
Fixed Interest Rate - Real | 47,064,843 | - | - | 47,140,927 | - | - | ||||||
Indexed to Price and Interest Rates | 4,467,252 | - | - | 2,388,118 | - | - | ||||||
Foreign Currency | 373,046,238 | 110,744,186 | 118,244,191 | 192,084,517 | 131,689,988 | 130,102,139 | ||||||
Others | 53,400 | - | - | - | - | - | ||||||
Liabilities | 465,926,236 | (123,784,816) | (138,597,925) | 284,049,611 | (149,772,631) | (148,834,464) | ||||||
CDI (Interbank Deposit Rates) | 28,253,873 | - | - | 24,353,405 | - | - | ||||||
Fixed Interest Rate - Real | 63,641,708 | (16,576,864) | (20,246,772) | 72,183,625 | (25,042,698) | (24,079,732) | ||||||
Indexed to Price and Interest Rates | 110,362,782 | (105,895,530) | (117,129,794) | 125,829,755 | (123,441,636) | (123,445,067) | ||||||
Foreign Currency | 262,302,052 | - | - | 60,394,529 | - | - | ||||||
Others | 1,365,821 | (1,312,422) | (1,221,359) | 1,288,297 | (1,288,297) | (1,309,665) | ||||||
Options | 873,745,818 | (211,618) | 525,125 | 1,446,522,960 | (713,618) | (633,977) | ||||||
Purchased Position | 369,856,979 | 468,701 | 2,725,949 | 678,089,905 | 641,142 | 1,065,752 | ||||||
Call Option - Foreign Currency | 230,928 | - | (14,658) | 171,871 | 1,318 | (281) | ||||||
Put Option - Foreign Currency | 454,842 | - | 7,789 | 1,456,975 | 392 | 4,355 | ||||||
Call Option - Other | 53,903,622 | 249,915 | 1,533,337 | 98,154,363 | 295,668 | 148,426 | ||||||
Interbank Market | 51,635,417 | 249,915 | 1,070,156 | 98,154,363 | 295,668 | 148,517 | ||||||
Others (2) | 2,268,205 | - | 463,181 | - | - | (91) | ||||||
Put Option - Other | 315,267,587 | 218,786 | 1,199,481 | 578,306,695 | 343,764 | 818,664 | ||||||
Interbank Market | 313,715,902 | 218,786 | 1,202,760 | 578,306,695 | 343,763 | 819,262 | ||||||
Others (2) | 1,551,685 | - | (3,279) | - | - | (599) | ||||||
Sold Position | 503,888,839 | (680,319) | (2,200,824) | 768,433,056 | (1,354,759) | (1,699,729) | ||||||
Call Option - Foreign Currency | 56,465 | - | (6,526) | 254,945 | (3,103) | (1,472) | ||||||
Put Option - Foreign Currency | 429,953 | (65) | (33,050) | 263,995 | (1,528) | (2,842) | ||||||
Call Option - Other | 115,497,539 | (251,381) | (585,919) | 174,153,628 | (562,827) | (440,731) | ||||||
Interbank Market | 108,435,760 | (251,381) | (559,924) | 174,166,802 | (562,827) | (440,959) | ||||||
Others (2) | 7,061,779 | - | (25,995) | (13,174) | - | 228 | ||||||
Put Option - Other | 387,904,882 | (428,873) | (1,575,329) | 593,760,488 | (787,301) | (1,159,126) | ||||||
Interbank Market | 380,956,376 | (428,873) | (1,230,825) | 593,760,488 | (787,301) | (1,159,038) | ||||||
Others (2) | 6,948,506 | - | (344,504) | - | - | (88) | ||||||
Futures Contracts | 428,185,005 | - | - | 433,873,181 | - | - | ||||||
Purchased Position | 124,319,898 | - | - | 72,912,029 | - | - | ||||||
Exchange Coupon (DDI) | 21,478,695 | - | - | 7,394,951 | - | - | ||||||
Interest Rates (DI1 and DIA) | 101,590,748 | - | - | 55,430,519 | - | - | ||||||
Foreign Currency | - | - | - | 9,978,419 | - | - | ||||||
Indexes (3) | 1,250,455 | - | - | - | - | - | ||||||
Treasury Bonds/Notes | - | - | - | 108,140 | - | - | ||||||
Sold Position | 303,865,107 | - | - | 360,961,152 | - | - | ||||||
Exchange Coupon (DDI) | 142,682,154 | - | - | 146,032,485 | - | - | ||||||
Interest Rates (DI1 and DIA) | 109,110,917 | - | - | 196,170,106 | - | - | ||||||
Foreign Currency | 49,522,991 | - | - | 17,305,604 | - | - | ||||||
Indexes (3) | 307,620 | - | - | 290,254 | - | - | ||||||
Treasury Bonds/Notes | 2,241,425 | - | - | 1,162,703 | - | - | ||||||
Forward Contracts and Others | 139,450,690 | 2,304,674 | 1,549,138 | 99,514,898 | (900,818) | (471,804) | ||||||
Purchased Commitment | 78,889,093 | 4,937,241 | 789,720 | 50,216,459 | (269,708) | 50,413 | ||||||
Currencies | 75,028,494 | 4,937,241 | 667,389 | 50,215,376 | (269,708) | 50,408 | ||||||
Others | 3,860,599 | - | 122,331 | 1,083 | - | 5 | ||||||
Sell Commitment | 60,561,597 | (2,632,567) | 759,418 | 49,298,439 | (631,110) | (522,217) | ||||||
Currencies | 58,923,133 | (2,632,567) | 758,972 | 49,294,662 | (631,085) | (522,305) | ||||||
Others | 1,638,464 | - | 446 | 3,777 | (25) | 88 |
(1) Nominal value of the updated contracts.
(2) Includes options of indexes, mainly being options involving US treasury, shares and stock indexes.
(3) Includes Bovespa and S&P indexes.
III) Derivative Financial Instruments by Counterparty, Opening by Maturity and Trading Market
Bank | ||||||||||||||||||||
Notional | ||||||||||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||||||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 03/31/2020 | |||||||||||||||||
Related | Financial | Up to | From 3 to | Over | Over the Counter (3) | |||||||||||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | ||||||||||||
Swap | 36,222,462 | 91,220,935 | 191,439,752 | 318,883,149 | 268,179,566 | 84,918,726 | 82,209,070 | 151,755,353 | 142,528,417 | 176,354,732 | ||||||||||
Options | 19,660,947 | 421,599 | 835,994,760 | 856,077,306 | 1,446,691,036 | 201,718,089 | 643,351,416 | 11,007,801 | 837,024,861 | 19,052,445 | ||||||||||
Futures Contracts | 2,154,408 | - | 425,497,940 | 427,652,348 | 432,564,399 | 316,521,646 | 50,732,812 | 60,397,890 | 427,652,348 | - | ||||||||||
Forward Contracts and Others | 64,698,862 | 60,299,063 | 14,448,856 | 139,446,781 | 100,659,795 | 72,006,312 | 39,831,265 | 27,609,204 | 4,214,611 | 135,232,170 | ||||||||||
Consolidated | ||||||||||||||||||||
Notional | ||||||||||||||||||||
By Counterparty | By Maturity | Trading Market | ||||||||||||||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 03/31/2020 | |||||||||||||||||
Related | Financial | Up to | From 3 to | Over | Over the Counter (3) | |||||||||||||||
Customers | Parties | Institutions (1) | Total | Total | 3 Months | 12 Months | 12 Months | Exchange (2) | ||||||||||||
Swap | 36,222,460 | 44,864,730 | 387,820,320 | 468,907,510 | 282,164,189 | 85,489,725 | 213,308,289 | 170,109,496 | 142,528,415 | 326,379,095 | ||||||||||
Options | 19,660,947 | 421,599 | 853,663,272 | 873,745,818 | 1,446,522,960 | 216,215,274 | 645,981,385 | 11,549,159 | 837,186,519 | 36,559,299 | ||||||||||
Futures Contracts | 2,154,403 | - | 426,030,602 | 428,185,005 | 433,873,181 | 316,804,400 | 50,879,120 | 60,501,485 | 428,185,005 | - | ||||||||||
Forward Contracts and Others | 64,698,862 | 60,299,063 | 14,452,765 | 139,450,690 | 99,514,898 | 72,010,224 | 39,831,262 | 27,609,204 | 4,214,611 | 135,236,079 |
(1) Includes operations with B3 S.A. - Brazil, Bolsa, Balcão (B3) and other stock and commodity exchanges as counterparty.
(2) Includes values traded at B3.
(3) It consists of operations that are included in registration chambers, according to Bacen regulations.
IV) Hedge Accounting
The effectiveness determined for the hedge portfolio is in accordance with Bacen Circular 3,082 / 2002 and the following hedge accounting structures were established:
IV.I) Market Risk Hedge
The Bank's market risk hedging strategies consist of a hedge of exposure to variation in market risk, in receipts and interest payments related to assets and liabilities recognized.
The Bank's market risk hedging methodology segregates transactions by risk factor (eg, real / dollar exchange rate risk, fixed interest rate risk in reais, dollar exchange rate risk, inflation, interest rate risk, etc.). Transactions generate exposures that are consolidated by risk factor and compared to pre-established internal limits.
To protect the market risk variation in the receipt and payment of interest, the Bank uses swap contracts and interest rate futures contracts relating to fixed assets and liabilities.
The Bank applies the market risk hedge as follows:
• Designates Foreign Currency + Coupon versus %CDI and Pre - Real Interest Rate or contracts dollar futures (DOL, DDI/DI) as derivatives instruments in Hedge Accounting structures, with foreign currency loan operations being the object of such transactions.
• The Bank has an active loan portfolio originating in Dollar at a fixed rate at Santander EFC, whose operations are recorded in Euro. As a way of managing this mismatch, the Bank designates each Euro Floating Foreign Currency swap versus Fixed Dollar corresponding credit protection instrument.
• The Bank has a portfolio of assets indexed to the Euro and traded at offshore branches. In the transaction, the value of the asset in Euro will be converted to the Dollar by the rate of the exchange contract of the transaction. As from the conversion, the principal amount of the funding, already expressed in US dollars, will be adjusted by a floating or fixed rate. The assets will be covered with Swap Cross Currency in order to cross the risk in Euro for LIBOR + Coupon.
• The Bank has a pre-fixed interest rate risk generated by government securities (NTN-F and LTN) in the Financial Assets portfolio available for sale. To manage this mismatch, the entity contracts DI futures on the Stock Exchange and designates them as a hedging instrument in a hedge accounting structure.
• The Bank has a risk to the IPCA index generated by debentures in the portfolio of securities available for sale. To manage this mismatch, the Bank contracts IPCA (DAP) futures on the Stock Exchange and designates them as a hedging instrument in a Hedge Accounting structure.
• Santander Leasing has a pre-fixed interest rate risk generated by government securities (NTN-F) in the portfolio of available-for-sale securities. To manage this mismatch, the Entity contracts interest swaps and designates them as a hedging instrument in a hedge accounting structure.
In market risk hedging, the results, both on hedging instruments and on the objects (attributable to the type of risk being hedged) are recognized directly in the income statement.
IV.II) Cash Flow Hedge
The Bank's cash flow hedging strategies consist of a hedge of exposure to changes in cash flows, interest payments and exchange rate exposure, which are attributable to changes in interest rates on recognized assets and liabilities and changes of unrecognized assets and liabilities.
The Bank applies the cash flow hedge as follows:
• It contracts fixed dollar swaps versus foreign exchange and designates them as a hedging instrument in a Cash Flow Hedge structure, with the purpose of protecting foreign exchange loans and negotiated with third parties through agency in offshore branches and securities held to maturity of Brazilian foreign debt securities.
• Contracts USD Futures or DDI + DI Futures (Synthetic Dollar Futures) and designates them as a derivative instrument in a Cash Flow Hedge structure, the object of which in this relation is part of the Bank's credit portfolio in Dollars and Promissory Notes in the portfolio of securities available for sale.
• The Bank has post-fixed interest rate risk generated by public securities (LFT) in the portfolio of available-for-sale securities, which present expected cash flows subject to Selic variations over their duration. To manage these oscillations, it contracts DI futures on the Stock Exchange and designates them as a derivative instrument in a Hedge Accounting structure.
• Banco RCI Brasil S.A. has operations CDI indexed whose purpose is funding with financial letters (LF), bills of exchange (LC) and Interbank Deposit Certificates (CDI) and designates interest rate swaps as instruments.
In cash flow hedge, the effective portion of the variation in the value of the hedge instrument is temporarily recognized in equity under the caption equity valuation adjustments until the forecasted transactions occur, when that portion is recognized in the income statement. The non-effective portion of the variation in the value of foreign exchange hedge derivatives is recognized directly in the income statement. As of March 31, 2020 and December 31, 2019, no results were recorded for the ineffective portion.
Bank | ||||||||||||||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||||||||||||||
Strategies | Adjustment to Fair Value | Accounting Value | Notional | Adjustment to Fair Value | Accounting Value | Notional | ||||||||||||||||||
Market Risk Hedge | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | ||||||||||||
Swap Contracts | (603,579) | (34,752) | 2,226,062 | 1,806,560 | 3,675,074 | 1,534,191 | 601,119 | 1,447,179 | 2,336,460 | 2,867,523 | 1,703,734 | 1,398,524 | ||||||||||||
Credit Operations Hedge | (724,283) | (76,849) | 892,129 | 686,183 | 1,332,528 | 656,845 | 60,414 | 895,584 | 1,254,893 | 1,772,132 | 1,162,872 | 859,426 | ||||||||||||
Securities Hedge | 120,704 | 42,097 | 1,333,933 | 1,120,377 | 2,342,546 | 877,345 | 540,705 | 551,594 | 1,081,567 | 1,095,391 | 540,862 | 539,098 | ||||||||||||
Futures Contracts | 2,603,164 | - | 51,846,538 | 56,930,056 | 50,135,220 | - | 3,000,490 | - | 48,427,614 | 789,631 | 45,854,445 | - | ||||||||||||
Securities Hedge | 2,603,164 | - | 51,846,538 | 56,930,056 | 50,135,220 | - | 3,000,490 | - | 48,427,614 | 789,631 | 45,854,445 | - | ||||||||||||
Cash Flow Hedge | ||||||||||||||||||||||||
Swap Contracts | - | (312,506) | 1,332,940 | 1,428,603 | 3,915,096 | 877,345 | 602,634 | 235,576 | 889,117 | 1,481,312 | 1,703,734 | - | ||||||||||||
Credit Operations Hedge | - | - | - | - | - | - | 56,887 | 25,467 | 687,239 | 163,567 | 1,162,872 | - | ||||||||||||
Securities Hedge | - | (312,506) | 1,332,940 | 1,428,603 | 3,915,096 | 877,345 | 545,747 | 210,109 | 201,878 | 1,317,745 | 540,862 | - | ||||||||||||
Futures Contracts | - | - | 38,848,253 | 37,702,208 | 31,804,112 | - | - | - | 7,726,566 | 54,460,972 | 45,854,445 | - | ||||||||||||
Credit Operations Hedge (2) (3) | - | - | 23,363,385 | 19,577,378 | 22,859,369 | - | - | - | 4,506,878 | 50,975,253 | - | - | ||||||||||||
Securities Hedge | - | - | 15,484,868 | 18,124,830 | 8,944,744 | - | - | - | 3,219,688 | 3,485,719 | 45,854,445 | - | ||||||||||||
Consolidated | ||||||||||||||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||||||||||||||
Strategies | Adjustment to Fair Value | Accounting Value | Notional | Adjustment to Fair Value | Accounting Value | Notional | ||||||||||||||||||
Market Risk Hedge | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | Objects (1) | Instruments (1) | ||||||||||||
Swap Contracts | (603,587) | (34,740) | 2,226,350 | 1,806,573 | 3,675,074 | 1,534,191 | 602,633 | 3,098,299 | 3,208,463 | 6,348,041 | 1,703,734 | 1,398,524 | ||||||||||||
Credit Operations Hedge | (724,291) | (76,836) | 892,417 | 686,196 | 1,332,528 | 656,845 | 56,887 | 905,541 | 2,021,557 | 2,023,750 | 1,162,872 | 859,426 | ||||||||||||
Securities Hedge | 120,704 | 42,097 | 1,333,933 | 1,120,377 | 2,342,546 | 877,345 | 545,747 | 2,192,759 | 1,186,907 | 4,324,291 | 540,862 | 539,098 | ||||||||||||
Futures Contracts | 2,603,164 | - | 51,846,538 | 56,930,056 | 50,135,220 | - | 3,000,490 | - | 48,427,614 | 789,631 | 45,854,445 | - | ||||||||||||
Securities Hedge | 2,603,164 | - | 51,846,538 | 56,930,056 | 50,135,220 | - | 3,000,490 | - | 48,427,614 | 789,631 | 45,854,445 | - | ||||||||||||
Cash Flow Hedge | ||||||||||||||||||||||||
Swap Contracts | - | (312,506) | 1,332,940 | 1,428,603 | 3,915,096 | 877,345 | - | 5,163,218 | 6,123,421 | 11,483,844 | 5,499,281 | 5,624,154 | ||||||||||||
Credit Operations Hedge | - | - | - | - | - | - | - | 3,494 | 977,621 | 432,378 | 687,239 | 90,518 | ||||||||||||
Securities Hedge | - | (312,506) | 1,332,940 | 1,428,603 | 3,915,096 | 877,345 | - | 210,109 | 201,878 | 1,317,745 | 198,415 | 1,107,636 | ||||||||||||
Funding Hedge | - | - | - | - | - | - | - | 4,949,615 | 4,943,922 | 9,733,721 | 4,613,628 | 4,426,000 | ||||||||||||
Futures Contracts | - | - | 38,848,253 | 37,702,208 | 31,804,112 | - | - | - | 7,726,566 | 54,460,972 | 54,194,819 | 4,501,878 | ||||||||||||
Credit Operations Hedge (2) (3) | - | - | 23,363,385 | 19,577,378 | 22,859,369 | - | - | - | 4,506,878 | 50,975,253 | 50,975,253 | 4,501,878 | ||||||||||||
Securities Hedge | - | - | 15,484,868 | 18,124,830 | 8,944,744 | - | - | - | 3,219,688 | 3,485,719 | 3,219,566 | - | ||||||||||||
(*) The Bank operates some Cash Flow Hedge strategies, hedging assets from its portfolio (object), regards that, the table is presented showing the liability amounts from the respective instruments. For structures whose objects are futures, the table is presented showing the balance of the daily adjustment, registered in the suspense accounts.
(1) Credit amounts refer to active operations and operations owed to passive operations.
(2) Updated value of the instruments on March 31, 2020 is R$7,492,114 (12/31/2019 - R$8,425,386).
At the Bank and Consolidated, the mark-to-market effect of swap and future asset contracts corresponds to a credit in the amount of R$11,877 (12/31/2019 - R$11,063) and is recorded in shareholders' equity, net of tax effects, of which R$6,532 will be realized against revenue in the next twelve months.
V) Credit Derivatives Information
Banco Santander uses credit derivatives with the objectives of performing counterparty risk management and meeting its customers' demands, performing protection purchase and sale transactions through credit default swaps and total return swaps, primarily related to Brazilian sovereign risk securities.
Total Return Swaps – TRS
Credit derivatives refer to the exchange of the return of the reference obligation by a cash flow and in which, in the event of a credit event, the protection buyer is usually entitled to receive from the protection seller the equivalent of the difference between the restated amount and the fair value (market value) of the reference obligation on the settlement date of the agreement.
Credit Default Swaps – CDS
These are credit derivatives where, in the event of a credit event, the protection buyer is entitled to receive from the protection seller the equivalent of the difference between the face value of the CDS agreement and the fair value (market value) of the reference obligation on the settlement date of the contract. In return, the seller receives compensation for the sale of the protection.
Below, the composition of the Credit Derivatives portfolio shown by its reference value and effect in the calculation of Required Stockholders' Equity.
Bank/Consolidated | ||||||||
Valor Nominal | ||||||||
03/31/2020 | 12/31/2019 | |||||||
Retained Risk - Total Rate of Return Swap | Transferred Risk - Credit Swap | Retained Risk - Total Rate of Return Swap | Transferred Risk - Credit Swap | |||||
Credit Swaps | 3,141,738 | - | 2,435,880 | - | ||||
Total | 3,141,738 | - | 2,435,880 | - |
Amount related to the premium paid on CDS for use as guarantee (risk transfer) in the amount of R$0 (12/31/2019 - R$0).
The effect on the PLE of the risk received was R$6,294 (12/31/2019 - R$5,257).
During the period there was no occurrence of a credit event related to taxable events provided for in the contracts.
03/31/2020 | 12/31/2019 | |||||||
Maximum Potential for Future Payments - Gross | Over 12 Months | Total | Over 12 Months | Total | ||||
Per Instrument: CDS | 3,141,738 | 3,141,738 | 2,435,880 | 2,435,880 | ||||
Per Risk Classification: Below Investment Grade | 3,141,738 | 3,141,738 | 2,435,880 | 2,435,880 | ||||
Per Reference Entity: Brazilian Government | 3,141,738 | 3,141,738 | 2,435,880 | 2,435,880 |
VI) Derivative Financial Instruments - Margin Given in Guarantee
The margin given as collateral for transactions traded on B3 with its own and third party derivative financial instruments is composed of federal government securities.
Bank | Consolidated | |||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||
Financial Literature of the Treasury - LFT | 1,073,062 | 5,342,992 | 1,073,062 | 5,950,561 | ||||
National Treasury Bills - LTN | 7,637,264 | 1,086,556 | 7,637,264 | 1,086,556 | ||||
| 1,448,569 | 660,918 | 1,448,569 | 841,790 | ||||
Total | 10,158,895 | 7,090,465 | 10,158,895 | 7,878,907 |
7. Loan Portfolio and Allowance for Loan Losses
a) Loan Portfolio
Bank | Consolidated | |||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||
Lending Operations | 238,994,554 | 211,251,830 | 310,297,977 | 280,899,334 | ||||
Loans and Discounted Titles | 136,130,661 | 116,282,045 | 151,131,995 | 130,994,834 | ||||
Financing | 49,344,499 | 42,287,183 | 105,646,588 | 97,221,898 | ||||
Rural and Agroindustrial - Financing | 13,350,781 | 12,940,784 | 13,350,781 | 12,940,784 | ||||
Real Estate Financing | 40,168,613 | 39,741,818 | 40,168,613 | 39,741,818 | ||||
Leasing Operations | - | - | 2,803,217 | 2,800,998 | ||||
Advances on Foreign Exchange Contracts (1) | 8,347,094 | 6,054,424 | 8,347,094 | 6,054,424 | ||||
Other Receivables (2) | 53,569,111 | 58,912,075 | 56,995,459 | 62,281,242 | ||||
Total | 300,910,759 | 276,218,329 | 378,443,747 | 352,035,998 |
(1) Advance on foreign exchange contracts are classified as a reduction of other obligations.
(2) Comprise receivables for guarantees honored other receivables - others (granted to borrowers to purchase securities, assets, notes and receivable - Note 9) and income receivable on foreign exchange contracts.
Sale or Transfer Operations of Financial Assets
According to CMN Resolution nº 3,533/2008 updated with later norms, the lending operations with substantial retention of risks and benefits, started from January 1, 2012 to remain registered in the loan portfolio. For lending operations made until December 31, 2011, regardless of the retention or transfer of substantial risks and benefits, financial assets were written off from the record of the original operation and the result recorded in the transfer to the appropriate result.
(i) With Substantial Transfer of Risks and Benefits
In the Bank and Consolidated, during quarter ended at March 31, 2020, operations were carried out credit assignment without co-obligation in the amount of R$139,414 (12/31/2019 - R$2,986,361) and were recorded substantially in borrowings and discounted securities, classified at risk level E and F. In the first quarter of 2020, there were no assignments between Group entities (12/31/2019 - R$746,106).
During the quarter ended March 31, 2020, loan assignments were made in full without co-obligation, in the amount of R$475,106 in the Bank and in the Consolidated relating to loan losses. In the first quarter of 2020, there were no assignments between Group entities.
(ii) With Substantial Retention of Risks and Benefits
On December 2011, the Bank made the assignment of receivables with recourse relating to real estate financing in the amount of R$688,821, which fall due until October 2041. On March 31, 2020, the present value of the divested operations is R$70,139 (12/31/2019- R$75,833).
These assignment operations were carried out with a co-obligation clause, and compulsory repurchase is envisaged in the following situations:
· Contracts in default for a period exceeding 90 consecutive days;
· Contracts subject to renegotiation;
· Contracts subject to portability in accordance with CMN Resolution nº 3,401/2006; and
· Contracts subject to intervention.
The compulsory repurchase price will be calculated by unpaid balance of the loan due date at the time of its repurchase.
From the date of transfer, cash flows from operations will be paid directly to the assignee entity.
b) Loan Portfolio by Maturity
Bank | Consolidated | |||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||
Overdue | 9,374,899 | 7,684,024 | 10,275,630 | 8,585,560 | ||||
Due to: | ||||||||
Up to 3 Months | 83,575,630 | 76,147,368 | 94,610,377 | 87,843,597 | ||||
From 3 to 12 Months | 81,340,661 | 69,667,171 | 102,993,423 | 90,380,199 | ||||
Over 12 Months | 126,619,569 | 122,719,766 | 170,564,317 | 165,226,642 | ||||
Total | 300,910,759 | 276,218,329 | 378,443,747 | 352,035,998 |
c) Loan Portfolio by Business Sector
Bank | Consolidated | |||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||
Private Sector | 299,843,237 | 275,100,366 | 377,374,826 | 350,916,654 | ||||
Industry | 63,991,600 | 53,728,646 | 64,979,632 | 54,671,234 | ||||
Commercial | 39,664,143 | 33,864,887 | 44,610,304 | 39,183,683 | ||||
Financial Institutions | 1,669,191 | 1,983,283 | 1,738,525 | 1,991,233 | ||||
Services and Other (1) | 49,150,870 | 41,607,698 | 52,080,593 | 44,886,880 | ||||
Individuals | 141,155,868 | 140,385,489 | 209,688,295 | 206,623,415 | ||||
Credit Cards | 31,827,928 | 34,914,437 | 31,827,928 | 34,914,437 | ||||
Mortgage Loans | 37,714,443 | 37,218,524 | 37,714,444 | 37,218,524 | ||||
Payroll Loans | 29,168,735 | 27,941,932 | 44,375,152 | 42,446,859 | ||||
Financing and Vehicles Lease | 2,330,114 | 2,379,093 | 53,359,800 | 51,774,184 | ||||
Others (2) | 40,114,648 | 37,931,503 | 42,410,971 | 40,269,411 | ||||
Agricultural | 4,211,565 | 3,530,363 | 4,277,477 | 3,560,209 | ||||
Public Sector | 1,067,522 | 1,117,964 | 1,068,921 | 1,119,344 | ||||
State (3) | 425,138 | 441,599 | 425,138 | 441,599 | ||||
Municipal | 642,384 | 676,365 | 643,783 | 677,745 | ||||
Total | 300,910,759 | 276,218,330 | 378,443,747 | 352,035,998 |
(1) Includes the activities of mortgage companies - business plan, transportation services, health, personal and others.
(2) Includes personal loans, overdraft among others.
(3) Mainly includes working capital operations.
d) Classification of Loan Portfolio and Respective Allowance for Loan Losses by Risk Level
Bank | ||||||||||||||||||||||||||||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||||||||||||||||||||||||||||
% | Loan Portfolio | Allowance | Loan Portfolio | Allowance | ||||||||||||||||||||||||||||||||||
Risk Level | Minimum Allowance Required | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total |
| ||||||||||||||||||||||||
AA | 0.0% | 143,891,548 | - | 143,891,548 | - | - | - | 121,753,569 | - | 121,753,569 | - | - | - | |||||||||||||||||||||||||
A | 0.5% | 78,342,957 | - | 78,342,957 | 391,715 | - | 391,715 | 77,795,391 | - | 77,795,391 | 388,977 | - | 388,977 | |||||||||||||||||||||||||
B | 1.0% | 26,496,267 | 2,535,411 | 29,031,678 | 290,317 | 32 | 290,349 | 23,816,916 | 2,120,722 | 25,937,638 | 259,376 | 17 | 259,393 | |||||||||||||||||||||||||
C | 3.0% | 19,712,786 | 2,265,275 | 21,978,061 | 659,342 | 70,145 | 729,487 | 19,823,183 | 1,966,467 | 21,789,650 | 653,690 | 1,665 | 655,355 | |||||||||||||||||||||||||
D | 10.0% | 6,256,979 | 2,234,603 | 8,491,582 | 849,158 | 1,434,163 | 2,283,321 | 7,926,118 | 2,088,778 | 10,014,896 | 1,001,490 | 1,547,683 | 2,549,173 | |||||||||||||||||||||||||
E | 30.0% | 2,136,651 | 2,094,596 | 4,231,247 | 1,269,374 | 666,540 | 1,935,914 | 2,266,765 | 2,323,208 | 4,589,973 | 1,376,992 | 659,874 | 2,036,866 | |||||||||||||||||||||||||
F | 50.0% | 1,851,922 | 1,408,418 | 3,260,340 | 1,630,170 | 471,397 | 2,101,567 | 1,769,671 | 1,475,413 | 3,245,084 | 1,622,542 | 447,224 | 2,069,766 | |||||||||||||||||||||||||
G | 70.0% | 1,474,681 | 1,628,339 | 3,103,020 | 2,172,114 | 495,124 | 2,667,238 | 1,450,313 | 1,225,377 | 2,675,690 | 1,872,983 | 418,317 | 2,291,300 | |||||||||||||||||||||||||
H | 100.0% | 2,519,197 | 6,113,131 | 8,632,328 | 8,632,328 | - | 8,632,328 | 2,734,332 | 5,676,805 | 8,411,137 | 8,411,137 | - | 8,411,137 | |||||||||||||||||||||||||
Total | 282,682,988 | 18,279,773 | 300,962,761 | 15,894,518 | 3,137,401 | 19,031,919 | 259,336,258 | 16,876,770 | 276,213,028 | 15,587,187 | 3,074,780 | 18,661,967 | ||||||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||||||||||||||||||||||||||||
Loan Portfolio | Allowance | Loan Portfolio | Allowance | |||||||||||||||||||||||||||||||||||
Risk Level | % Minimum Allowance Required | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total | Current | Past Due (1) | Total (3) | Required | Additional (2) | Total |
| ||||||||||||||||||||||||
AA | 0.0% | 162,694,109 | 11,242 | 162,705,351 | - | - | - | 141,187,755 | - | 141,187,755 | - | - | - | |||||||||||||||||||||||||
A | 0.5% | 122,805,811 | - | 122,805,811 | 614,029 | 20,764 | 634,793 | 120,434,015 | - | 120,434,015 | 602,170 | 20,772 | 622,942 | |||||||||||||||||||||||||
B | 1.0% | 31,853,383 | 4,544,588 | 36,397,971 | 363,980 | 32 | 364,012 | 29,095,941 | 3,746,497 | 32,842,438 | 328,424 | 18 | 328,442 | |||||||||||||||||||||||||
C | 3.0% | 20,866,420 | 3,982,505 | 24,848,925 | 745,468 | 70,142 | 815,610 | 21,140,394 | 3,371,115 | 24,511,509 | 735,345 | 1,664 | 737,009 | |||||||||||||||||||||||||
D | 10.0% | 6,532,899 | 3,052,729 | 9,585,628 | 958,564 | 1,434,163 | 2,392,727 | 8,368,581 | 2,820,515 | 11,189,096 | 1,118,910 | 1,547,683 | 2,666,593 | |||||||||||||||||||||||||
E | 30.0% | 2,204,094 | 2,640,305 | 4,844,399 | 1,453,320 | 666,540 | 2,119,860 | 2,332,530 | 2,835,000 | 5,167,530 | 1,550,259 | 659,875 | 2,210,134 | |||||||||||||||||||||||||
F | 50.0% | 1,937,845 | 1,809,739 | 3,747,584 | 1,873,791 | 471,397 | 2,345,188 | 1,859,486 | 1,812,213 | 3,671,699 | 1,835,850 | 447,224 | 2,283,073 | |||||||||||||||||||||||||
G | 70.0% | 1,505,253 | 1,880,073 | 3,385,326 | 2,369,729 | 495,124 | 2,864,853 | 1,482,247 | 1,458,609 | 2,940,856 | 2,058,599 | 418,318 | 2,476,917 | |||||||||||||||||||||||||
H | 100.0% | 2,752,365 | 7,414,103 | 10,166,468 | 10,166,468 | - | 10,166,468 | 2,943,753 | 7,139,229 | 10,082,982 | 10,082,982 | - | 10,082,982 | |||||||||||||||||||||||||
Total | 353,152,179 | 25,335,284 | 378,487,463 | 18,545,349 | 3,158,162 | 21,703,511 | 328,844,702 | 23,183,178 | 352,027,880 | 18,312,539 | 3,095,554 | 21,408,092 | ||||||||||||||||||||||||||
(1) Includes installments falling due and overdue.
(2) The additional provision is constituted based mainly on the expectation of realization of the loan portfolio, in addition to the minimum required by the current regulation.
(3) The total loan portfolio includes the amount of R$ 52,001 (12/31/2019 - R$ 5,301) in the Bank and R$ 43,711 (12/31/2019 - R$ 8,118) in Consolidated, referring to the adjustment to market value credit operations that are subject to protection, registered in accordance with article 5 of Bacen Circular Letter 3,624 of December 26, 2013 and which are not included in the note on risk levels (Note 6.b.VI.a).
e) Changes in Allowance for Loan Losses
Bank | Consolidated | |||||||
01/01 a 03/31/2020 | 01/01 a 03/31/2019 | 01/01 a 03/31/2020 | 01/01 a 03/31/2019 | |||||
Opening Balance | 18,661,967 | 16,734,154 | 21,408,092 | 18,789,123 | ||||
Allowances Recognized | 2,850,453 | 2,527,986 | 3,586,383 | 3,013,446 | ||||
Write-offs | (2,480,501) | (2,656,501) | (3,290,964) | (3,102,602) | ||||
Closing Balance | 19,031,919 | 16,605,639 | 21,703,511 | 18,699,967 | ||||
Recoveries Credits (1) | 424,320 | 456,898 | 512,538 | 445,751 |
(1) Recorded as income from financial intermediation under the headings: credit operations and leasing operations. Includes the result of the assignment of credits without recourse to operations previously written off to losses in the amount of R$23,269 (2019 - R$12,981) in the Bank and R$23,269 (2019 - R$12,981) in the Consolidated.
f) Renegotiated Credits
Bank | Consolidated | |||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | |||||
Renegotiated Credits | 14,533,045 | 13,752,395 | 17,098,389 | 16,292,323 | ||||
Allowance for Loan Losses | (7,926,952) | (7,525,483) | (8,565,313) | (8,283,230) | ||||
Percentage of Coverage on Renegotiated Credits | 54.5% | 54.7% | 50.1% | 50.8% |
g) Loan Portfolio Concentration
Consolidated | ||||||||
03/31/2020 | 12/31/2019 | |||||||
Loan Portfolio and Credit Guarantees (1), Securities (2) and Derivatives Financial Instruments (3) | Risk | % | Risk | % | ||||
Largest Debtor | 6,685,069 | 1.4% | 4,207,082 | 0.9% | ||||
10 Largest | 34,431,478 | 7.2% | 30,837,795 | 6.9% | ||||
20 Largest | 53,795,455 | 11.2% | 48,360,114 | 10.9% | ||||
50 Largest | 86,242,674 | 18.0% | 78,111,867 | 17.6% | ||||
100 Largest | 115,304,713 | 24.1% | 102,168,739 | 23.0% | ||||
(1) Includes installments of credit to builders/developers.
(2) Refers to debentures, promissory notes and certificates of real estate receivables – CRI.
(3) Refers to credit of derivatives risk.
8. Tax Assets and Liabilities
a) Tax Credits
a.1) Nature and Origin of Recorded Deferred Tax Assets
Bank | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition (4) | Realization | 03/31/2020 | |||||
Allowance for Loan Losses | 14,047,657 | 1,245,535 | (546,058) | 14,747,134 | ||||
Reserve for Legal and Administrative Proceedings - Civil | 1,503,264 | 189,211 | (87,843) | 1,604,632 | ||||
Reserve for Tax Risks and Legal Obligations | 1,541,030 | 107,926 | (9,664) | 1,639,292 | ||||
Reserve for Legal and Administrative Proceedings - Labor | 2,249,941 | 221,956 | (168,495) | 2,303,402 | ||||
Agio | - | 15,449 | - | 15,449 | ||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 2,092,265 | 13,217 | (109,165) | 1,996,317 | ||||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 76,976 | 211,865 | - | 288,841 | ||||
Accrual for Pension Plan (2) | 1,882,812 | 14,426 | (450,381) | 1,446,857 | ||||
Profit Sharing, Bonuses and Personnel Gratuities | 436,935 | 197,524 | (433,547) | 200,912 | ||||
Other Temporary Provisions (3) | 3,881,291 | - | (57,263) | 3,824,028 | ||||
Total Tax Credits on Temporary Differences | 27,712,171 | 2,217,109 | (1,862,416) | 28,066,864 | ||||
Tax Losses and Negative Social Contribution Bases | - | 10,804,323 | - | 10,804,323 | ||||
Social Contribution Tax - Executive Act 2,158/2001 | 362,239 | - | (187,081) | 175,158 | ||||
Balance of Recorded Deferred Tax Assets | 28,074,410 | 13,021,432 | (2,049,497) | 39,046,345 | ||||
Consolidated | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition (4) | Realization | 03/31/2020 | |||||
Allowance for Loan Losses | 15,961,619 | 1,590,671 | (800,178) | 16,752,112 | ||||
Reserve for Legal and Administrative Proceedings - Civil | 1,617,816 | 228,870 | (124,576) | 1,722,110 | ||||
Reserve for Tax Risks and Legal Obligations | 2,367,352 | 116,948 | (16,455) | 2,467,845 | ||||
Reserve for Legal and Administrative Proceedings - Labor | 2,388,470 | 232,081 | (179,843) | 2,440,708 | ||||
Agio | - | 15,449 | - | 15,449 | ||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 2,095,470 | 37,035 | (111,613) | 2,020,892 | ||||
Adjustment to Fair Value of Available-for-sale Securities and Cash Flow Hedge (1) | 153,977 | 229,981 | (0) | 383,958 | ||||
Accrual for Pension Plan (2) | 1,897,061 | 14,426 | (453,977) | 1,457,510 | ||||
Profit Sharing, Bonuses and Personnel Gratuities | 496,820 | 222,200 | (489,974) | 229,046 | ||||
Other Temporary Provisions (3) | 4,155,209 | 79,186 | (101,811) | 4,132,584 | ||||
Total Tax Credits on Temporary Differences | 31,133,794 | 2,766,847 | (2,278,427) | 31,622,214 | ||||
Tax Losses and Negative Social Contribution Bases | 408,338 | 10,833,240 | (53,221) | 11,188,357 | ||||
Social Contribution Tax - Executive Act 2,158/2001 | 362,240 | - | (187,082) | 175,158 | ||||
Balance of Recorded Deferred Tax Assets | 31,904,372 | 13,600,087 | (2,518,730) | 42,985,729 | ||||
(1) Includes tax credits IRPJ, CSLL, PIS and Cofins.
(2) Includes tax credits IRPJ and CSLL, adjustments on plan benefits to employees as mentioned Note 3.n.
(3) Composed mainly by administrative provisions nature.
(4) Includes the effects of the change in the CSLL rate for banks of any kind, in accordance with Constitutional Amendment 103/19.
On March 31, 2020, there are deferred tax assets not registered in assets in the amount of R$20,106 (12/31/2019 - R$209,771) in the Bank and R$27,317 (12/31/2019 - R$209,771) in the Consolidated, whose expectation of achievement exceeds 10 years.
The accounting record of the deferred tax assets in the Santander Brasil financial statements was made at the rates applicable to the expected period of its realization and is based on the projection of future results and a technical study prepared pursuant to CMN Resolution nº 3,059/2002, with the amendments to the Resolution CMN nº 4,441/2015.
a.2) Expected Realization of Recorded Tax Credits
Bank | ||||||||||||
03/31/2020 | ||||||||||||
Temporary Differences | Tax Loss - Carryforwards | Total | ||||||||||
Year | IRPJ | CSLL | PIS/Cofins | CSLL 18% | Recorded | |||||||
2020 | 3,436,972 | 2,762,051 | 55,922 | 5,986,420 | 12,241,365 | |||||||
2021 | 4,616,153 | 3,713,950 | 74,563 | 659,732 | 175,158 | 9,239,556 | ||||||
2022 | 4,290,004 | 3,447,282 | 74,563 | 794,747 | - | 8,606,596 | ||||||
2023 | 1,326,777 | 1,071,708 | 18,641 | 1,674,620 | - | 4,091,746 | ||||||
2024 | 1,088,469 | 821,978 | - | 708,422 | - | 2,618,869 | ||||||
2025 a 2027 | 363,368 | 292,850 | - | 980,382 | - | 1,636,600 | ||||||
2028 a 2029 | 328,041 | 283,572 | - | - | - | 611,613 | ||||||
Total | 15,449,784 | 12,393,391 | 223,689 | 10,804,323 | 175,158 | 39,046,345 | ||||||
Consolidated | ||||||||||||
03/31/2020 | ||||||||||||
Temporary Differences | Tax Loss - Carryforwards | Total | ||||||||||
Year | IRPJ | CSLL | PIS/Cofins | CSLL 18% | Recorded | |||||||
2020 | 3,895,598 | 3,048,248 | 58,137 | 6,071,164 | 13,073,147 | |||||||
2021 | 5,155,083 | 4,048,169 | 77,516 | 709,799 | 175,158 | 10,165,725 | ||||||
2022 | 4,784,304 | 3,754,730 | 77,516 | 821,253 | - | 9,437,803 | ||||||
2023 | 1,503,213 | 1,181,656 | 19,418 | 1,694,670 | - | 4,398,957 | ||||||
2024 | 1,594,762 | 1,069,772 | 53 | 745,964 | - | 3,410,551 | ||||||
2025 a 2027 | 373,992 | 297,201 | 159 | 1,140,106 | - | 1,811,458 | ||||||
2028 a 2029 | 354,192 | 328,376 | 119 | 5,401 | - | 688,088 | ||||||
Total | 17,661,144 | 13,728,152 | 232,918 | 11,188,357 | 175,158 | 42,985,729 | ||||||
Due to differences between accounting, tax and corporate, expected realization of tax credits should not be taken as indicative of future net income.
a.3) Present Value of Tax Credits
The present value of the tax credits recorded is R$35,850,894 (12/31/2019 - R$25,724,592) in the Bank and R$39,369,813, (12/31/2019 - R$29,133,062) in the Consolidated, calculated according to with the expectation of realizing the temporary differences, tax loss carryforwards, negative social contribution tax, Social Contribution 18% - MP 2,158/2001 and the average funding rate, projected for the corresponding periods.
b) Other Liabilities - Tax and Social Security
Bank | Consolidated | ||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | ||||
Deferred Tax Liabilities | 4,691,007 | 5,444,706 | 5,265,375 | 6,013,811 | |||
Provision for Taxes and Contributions on Income | - | - | 562,082 | 460,654 | |||
Taxes Payable | 391,328 | 1,069,765 | 671,937 | 1,817,392 | |||
Total | 5,082,335 | 6,514,471 | 6,499,394 | 8,291,857 |
b.1) Nature and Origin of Deferred Tax Liabilities
Bank | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition | Realization | 03/31/2020 | |||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 1,573,996 | 278,837 | - | 1,852,833 | ||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 3,737,329 | - | (1,034,566) | 2,702,763 | ||||
Excess Depreciation of Leased Assets | 5,441 | - | (2) | 5,439 | ||||
Others | 127,940 | 16,222 | (14,190) | 129,972 | ||||
Total | 5,444,706 | 295,059 | (1,048,758) | 4,691,007 | ||||
Consolidated | ||||||||
Balances on | Balances on | |||||||
12/31/2019 | Recognition | Realization | 03/31/2020 | |||||
Adjustment to Fair Value of Trading Securities and Derivatives (1) | 1,686,421 | 296,906 | (31,310) | 1,952,017 | ||||
Adjustment to Fair Value of Available-for-Sale Securities and Cash Flow Hedge (1) | 3,807,649 | 5,910 | (1,038,290) | 2,775,269 | ||||
Excess Depreciation of Leased Assets | 318,240 | 12,102 | (807) | 329,535 | ||||
Others | 201,501 | 26,191 | (19,138) | 208,554 | ||||
Total | 6,013,811 | 341,109 | (1,089,545) | 5,265,375 | ||||
(1) Includes IRPJ, CSLL, PIS and Cofins
b.2) Expected Realization of Deferred Tax Liabilities
Bank | ||||||||
3/31/2020 | ||||||||
Temporary Differences | Total | |||||||
Year | IRPJ | CSLL | PIS/Cofins | Recorded | ||||
2020 | 577,639 | 461,010 | 111,357 | 1,150,006 | ||||
2021 | 770,186 | 614,680 | 148,477 | 1,533,343 | ||||
2022 | 770,186 | 614,680 | 148,477 | 1,533,343 | ||||
2023 | 197,970 | 157,995 | 37,119 | 393,084 | ||||
2024 | 7,231 | 5,765 | - | 12,996 | ||||
2025 a 2027 | 21,693 | 17,299 | - | 38,992 | ||||
2028 a 2029 | 16,269 | 12,974 | - | 29,243 | ||||
Total | 2,361,174 | 1,884,403 | 445,430 | 4,691,007 | ||||
Consolidated | ||||||||
3/31/2020 | ||||||||
Temporary Differences | Total | |||||||
Year | IRPJ | CSLL | PIS/Cofins | Recorded | ||||
2020 | 695,300 | 482,293 | 113,760 | 1,291,353 | ||||
2021 | 893,614 | 639,965 | 151,681 | 1,685,260 | ||||
2022 | 849,595 | 639,965 | 151,680 | 1,641,240 | ||||
2023 | 245,677 | 164,984 | 37,948 | 448,609 | ||||
2024 | 44,370 | 6,658 | 35 | 51,063 | ||||
2025 a 2027 | 94,760 | 19,105 | 106 | 113,971 | ||||
2028 a 2029 | 19,530 | 14,269 | 80 | 33,879 | ||||
Total | 2,842,846 | 1,967,239 | 455,290 | 5,265,375 | ||||
c) Income Tax and Social Contribution
Bank | Consolidated | |||||||
01/01 a 03/31/2020 | 01/01 a 03/31/2019 | 01/01 a 03/31/2020 | 01/01 a 03/31/2019 | |||||
Income Before Taxes on Income and Profit Sharing | (6,911,746) | 4,721,012 | (6,310,398) | 5,351,981 | ||||
Profit Sharing (1) | (437,504) | (426,990) | (479,097) | (468,440) | ||||
Unrealized Income | - | - | 168,757 | 219,722 | ||||
Income Before Taxes | (7,349,250) | 4,294,022 | (6,620,738) | 5,103,263 | ||||
Total Income and Social Contribution Tax at the Rates of 25% and 20%, Respectively (4) | 3,307,163 | (1,717,609) | 2,979,332 | (2,041,305) | ||||
Equity in Subsidiaries (2) | 402,998 | 356,346 | 3,272 | 4,541 | ||||
Nondeductible Expenses, Net of Non-Taxable Income | 3,046 | 352,045 | 21,729 | 430,019 | ||||
Exchange Variation - Foreign Branches | 6,418,523 | 81,884 | 6,418,524 | 81,884 | ||||
Income and Social Contribution Taxes on Temporary Differences and Tax Losses from Previous Exercises | 375,655 | (636) | 408,538 | (14,037) | ||||
Interest on Capital | - | - | 8,520 | - | ||||
Effects of Change in Rate of CSLL (3) | - | - | 64,378 | 24,894 | ||||
Other Adjustments Social Contribution Taxes 5% | 56,792 | - | 86,254 | - | ||||
Other Adjustments, Including Profits Provided Abroad | 573,613 | 32,492 | 615,872 | 137,922 | ||||
Income and Social Contribution Taxes | 11,137,790 | (895,478) | 10,606,419 | (1,376,082) | ||||
(1) The basis of calculation is the net income, after IR and CSLL.
(2) As a result of equity in subsidiaries are not included interest on capital received and receivable.
(3) Effect of rate differences for the other financial and non-financial companies, which the social contribution tax rate is 15% and 9%, respectively.
(4) Change in the CSLL rate, beginning on March 31, 2020, with an undetermined term.
Foreign Exchange Hedge of the Grand Cayman Branch, Luxembourg Branch and the Subsidiary Santander Brasil EFC
Banco Santander operates two branchs, one in the Cayman Islands and one in Luxembourg, and a subsidiary called Santander Brasil Establecimiento Financiero de Credito, EFC, or “Santander Brasil EFC” (independent subsidiary in Spain) which are used mainly to raise funds in the capital and financial markets, providing credit lines that are extended to customers for trade-related financings and working capital (Note 13).
To protect the exposures to foreign exchange rate variations, the Bank uses derivatives and international funding. According to Brazilian tax rules, the gains or losses resulting from the impact of appreciation or depreciation of the local currency (real) in foreign investments are nontaxable or deductible to PIS/Cofins/IR/CSLL, while gains or losses from derivatives used as hedges are taxable or deductible. The purpose of these derivatives are to protect the after-tax results.
Tax treatment distinct from such exchange rate differences results in volatility in "Operating Income before Taxation" and in the caption "Income Taxes". Following are the effects of the operations carried out, as well as the total effect of the Currency Hedge for the period ended in March 31, 2020 and 2019:
R$ | 01/01 a 03/31/2020 | 01/01 a 03/31/2019 | ||
Financial Operations | ||||
Result generated by the exchange rate variations on the Bank's investment in the Cayman and EFC Agency | 18,586,046 | 225,467 | ||
Result generated by derivative contracts used as hedge | (31,411,700) | (396,760) | ||
Tax Expenses | ||||
Tax effect of derivative contracts used as hedge - PIS/COFINS | 526,883 | 18,449 | ||
Income Tax and Social Contribution | ||||
Tax effect of derivative contracts used as hedge - IR/CS | 12,298,771 | 152,844 | ||
(1) The basis of calculation is the net income, after IR and CSLL.
9. Other Receivables – Other
Bank | Consolidated | ||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | ||||
Notes and Credits Receivable (Note 7.a) | |||||||
Credit Cards | 25,372,753 | 28,854,952 | 25,482,340 | 28,973,079 | |||
Receivables (1) | 26,859,976 | 28,984,542 | 30,622,340 | 31,820,361 | |||
Escrow Deposits for: | |||||||
Tax Claims | 5,769,601 | 5,644,233 | 7,584,069 | 7,445,344 | |||
Labor Claims | 2,046,163 | 2,022,832 | 2,241,416 | 2,208,429 | |||
Others - Civil | 1,068,696 | 1,057,348 | 1,325,594 | 1,319,644 | |||
Contract Guarantees - Former Controlling Stockholders (Note 22.i) (2) | 103,829 | 103,272 | 103,829 | 103,272 | |||
Recoverable Taxes | 2,284,932 | 2,238,982 | 3,264,061 | 3,320,147 | |||
Receivables - Buyer Services | - | - | - | - | |||
Reimbursable Payments | 202,963 | 196,039 | 229,144 | 225,380 | |||
Salary Advances/Others | 68,280 | 100,128 | 195,968 | 325,185 | |||
Employee Benefit Plan | 287,565 | 283,046 | 352,028 | 346,422 | |||
Debtors for Purchase of Assets (Note 7.a) | 673,609 | 653,347 | 734,198 | 713,936 | |||
Receivable from Affiliates | 42,386 | 44,457 | 19,956 | 18,842 | |||
Others | 1,860,094 | 1,284,510 | 3,102,563 | 3,015,028 | |||
Total | 66,640,847 | 71,467,688 | 75,257,506 | 79,835,069 |
(1) It consists of operations with credit assignment characteristics substantially composed of "Confirming" operations with companies subject to credit risk and analysis of loan losses by segment in accordance with the Bank risk policies.
10. Dependencies Information and Foreign Subsidiary
Branches:
Cayman
The Grand Cayman Agency is licensed under the Banks and Fiduciary Companies Act and is duly registered as a Foreign Company with the Registrar of Companies in Grand Cayman, Cayman Islands. The agency is therefore duly authorized to carry out banking business in the Cayman Islands and is currently engaged in fund raising business in the international banking and capital market to provide credit lines to Banco Santander, which are then extended to Banco Santander clients' for financing working capital and foreign trade. It also receives deposits in foreign currency from corporate clients and individuals and provides credit to Brazilian and foreign clients, primarily to support commercial operations with Brazil.
Luxembourg
On June 9, 2017, Banco Santander obtained authorization from the Brazilian Central Bank to set up an agency in Luxembourg with a capital of US$1 billion, with the objective of complementing the foreign trade strategy for corporate clients (large Brazilian companies and their operations abroad) and offer financial products and services through an offshore entity that is not established in a jurisdiction with favored taxation and that allows for the increase of funding capacity. The opening of the agency was authorized by the Minister of Finance of Luxembourg on March 5, 2018. On April 3, 2018, after the reduction of the capital of the Cayman Agency in the equivalent amount, the value of US$1 billion was allocated to capital of the Luxembourg branch.
Subsidiary:
Banco Santander has a subsidiary in Spain, Santander Brasil, Establecimiento Financiero de Credito, S.A. (Santander Brasil EFC), to complement the foreign trade strategy for corporate clients - large brazilian companies and their operations abroad - and offer products and financial services through an offshore entity that is not established in a jurisdiction with favored taxation.
The summarized financial position of dependency and foreign subsidiary, converted at the exchange rate prevailing at balance sheet date in the financial statements include (without eliminating transactions with related parties):
Grand Cayman Branch (3) | Luxembourg Branch (3) | Santander Brasil EFC (3) | |||||||||
3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | 3/31/2020 | 12/31/2019 | ||||||
Assets | 180,621,575 | 124,944,302 | 32,447,652 | 19,955,679 | 4,859,142 | 3,850,302 | |||||
Current and Long-term Assets | 180,621,575 | 124,944,302 | 32,447,307 | 19,955,392 | 4,859,142 | 3,850,302 | |||||
Cash | 839,357 | 3,205,293 | 208,169 | 162,231 | 1,179,767 | 319,152 | |||||
Interbank Investments | 54,316,186 | 34,116,739 | 2,098,749 | 1,941,192 | 2,863,200 | 2,582,385 | |||||
Securities and Derivatives Financial Instruments | 90,778,579 | 63,736,330 | 2,889,862 | 1,002,697 | 23,626 | 16,799 | |||||
Lending Operations (1) | 24,628,189 | 16,466,558 | 26,698,668 | 16,570,321 | 406,484 | 590,941 | |||||
Foreign Exchange Portfolio | 5,456,832 | 4,145,245 | 312,209 | 167,985 | - | - | |||||
Others | 4,602,432 | 3,274,137 | 239,650 | 110,966 | 386,065 | 341,025 | |||||
Permanent Assets | - | - | 345 | 287 | - | - | |||||
Liabilities | 180,621,575 | 124,944,302 | 32,447,653 | 19,955,679 | 4,859,141 | 3,850,302 | |||||
Current and Long-term Liabilities | 107,768,377 | 70,332,537 | 26,372,161 | 15,429,041 | 395,378 | 303,219 | |||||
Deposits and Money Market Funding | 24,254,929 | 10,798,572 | 2,835,338 | 2,469,606 | 37,623 | 29,766 | |||||
Funds from Acceptance and Issuance of Securities | 21,926,438 | 14,999,864 | 16,247,971 | 6,235,813 | - | - | |||||
Debt Instruments Eligible to Compose Capital | 13,341,999 | 10,175,961 | - | - | - | - | |||||
Borrowings (2) | 31,060,941 | 24,297,747 | 5,855,291 | 6,318,373 | - | - | |||||
Foreign Exchange Portfolio | 5,426,272 | 4,120,196 | 308,944 | 168,134 | - | - | |||||
Others | 11,757,798 | 5,940,197 | 1,124,617 | 237,115 | 357,755 | 273,453 | |||||
Deferred Income | 854 | 119 | 14,824 | 12,331 | 27 | 29 | |||||
Stockholders' Equity | 72,852,344 | 54,611,646 | 6,060,668 | 4,514,307 | 4,463,736 | 3,547,054 | |||||
01/01 a | 01/01 a | 01/01 a | 01/01 a | 01/01 a | 01/01 a | ||||||
Net Income | 1,118,717 | 628,094 | 238,527 | 63,261 | (22,285) | (543) | |||||
(1) Refers mainly to lending and export financing operations.
(2) Borrowings abroad regarding financing lines to exports and imports and other lines of credit.
(3) The functional currency is Real.
11. Investments in Affiliates and Subsidiaries Subsidiary
Bank | |||||||||||||||||||||||||||||||||||
Adjusted Stockholders' Equity | Net Income (Loss) Adjusted | Investments Value | Equity Accounting Results | ||||||||||||||||||||||||||||||||
01/31/2020 | 01/01 a 03/31/2020 | 03/31/2020 | 12/31/2019 | 01/01 a 03/31/2020 | 01/01 a 03/31/2019 | ||||||||||||||||||||||||||||||
Controlled by Banco Santander | |||||||||||||||||||||||||||||||||||
Santander Leasing | 5,807,192 | 54,466 | 4,563,323 | 4,528,041 | 43,175 | 36,341 | |||||||||||||||||||||||||||||
Banco Bandepe S.A. | 5,275,829 | 299 | 5,275,829 | 5,277,643 | 299 | 124,870 | |||||||||||||||||||||||||||||
Santander Brasil EFC | 4,463,737 | (22,285) | 4,463,737 | 3,547,055 | (22,285) | (543) | |||||||||||||||||||||||||||||
Santander Corretora de Seguros | 3,157,795 | 154,826 | 3,157,795 | 3,002,236 | 154,826 | 107,931 | |||||||||||||||||||||||||||||
Getnet S.A. | 2,744,215 | 132,636 | 2,744,215 | 2,611,765 | 132,636 | 127,247 | |||||||||||||||||||||||||||||
Goodwill on the acquisition of Getnet S.A. non controlling interest | - | - | 1,050,700 | 1,080,439 | - | - |
| ||||||||||||||||||||||||||||
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A. | 1,578,566 | 22,977 | 1,560,029 | 1,322,052 | 22,977 | 7,709 |
| ||||||||||||||||||||||||||||
Aymoré CFI | 1,221,030 | 245,541 | 1,221,030 | 937,539 | 245,541 | 369,350 | |||||||||||||||||||||||||||||
Sancap | 1,042,414 | (12,930) | 1,042,414 | 1,040,469 | (12,945) | 35,291 | |||||||||||||||||||||||||||||
Banco Olé Consignado (1) | 1,630,677 | 136,882 | 978,406 | 926,278 | 82,129 | 80,725 | |||||||||||||||||||||||||||||
Bosan S.A. | 652,442 | 47,167 | 652,442 | - | 47,167 | - | |||||||||||||||||||||||||||||
Goodwill on the acquisition of Bosan S.A. | - | - | 950,064 | - | - | - |
| ||||||||||||||||||||||||||||
Santander CCVM | 678,286 | 31,475 | 678,286 | 646,400 | 31,475 | 22,212 | |||||||||||||||||||||||||||||
Banco RCI Brasil S.A. | 1,355,640 | 57,289 | 540,777 | 524,503 | 22,853 | 15,147 | |||||||||||||||||||||||||||||
Santander Brasil Consórcio | 479,122 | 54,166 | 479,122 | 424,956 | 54,166 | 46,837 | |||||||||||||||||||||||||||||
Others | 1,186,365 | 82,044 | 946,611 | 941,417 | 93,538 | (82,253) | |||||||||||||||||||||||||||||
Total | 30,304,780 | 26,810,793 | 895,552 | 890,864 | |||||||||||||||||||||||||||||||
Consolidated |
| ||||||||||||||||||||||||||||||||||
Adjusted Stockholders' Equity | Net Income (Loss) Adjusted | Investments Value | Equity Accounting Results |
| |||||||||||||||||||||||||||||||
01/31/2020 | 01/01 a 03/31/2020 | 03/31/2020 | 12/31/2019 | 01/01 a 03/31/2020 | 01/01 a 03/31/2019 |
| |||||||||||||||||||||||||||||
Jointly Controlled Companies Directly and Indirectly by Banco Santander | |||||||||||||||||||||||||||||||||||
TecBan | 500,643 | 9,763 | 95,021 | 94,155 | 1,853 | 1,658 |
| ||||||||||||||||||||||||||||
Gestora de Crédito | 223,556 | (15,163) | 44,711 | 47,744 | (3,033) | (93) |
| ||||||||||||||||||||||||||||
Webmotors S.A. | 181,490 | 11,931 | 127,043 | 126,440 | 8,351 | 9,138 |
| ||||||||||||||||||||||||||||
Norchem Holdings | 73,317 | 34 | 21,262 | 21,252 | 10 | 147 |
| ||||||||||||||||||||||||||||
Cibrasec (3) | - | - | - | - | - | 40 |
| ||||||||||||||||||||||||||||
Norchem Participações | 42,488 | 328 | 21,245 | 21,080 | 164 | 336 |
| ||||||||||||||||||||||||||||
EBP | 11,554 | 177 | 1,284 | 3,889 | 20 | 29 |
| ||||||||||||||||||||||||||||
Santander Auto | 24,201 | (521) | 12,100 | 12,374 | (260) | 61 |
| ||||||||||||||||||||||||||||
Hyundai Corretora de Seguros Ltda. | 1,779 | (89) | 890 | 934 | (44) | - |
| ||||||||||||||||||||||||||||
PSA Corretora | 1,503 | 423 | 752 | 540 | 211 | 36 |
| ||||||||||||||||||||||||||||
Others (2) | 5,265 | 5,266 | - | - |
| ||||||||||||||||||||||||||||||
Total | 329,573 | 333,674 | 7,272 | 11,352 |
| ||||||||||||||||||||||||||||||
(1) On January 31, 2020, the purchase of the minority stake in Banco Olé Consignado SA was completed, thus, the Bank became, directly and indirectly, holder of 100% of the shares of Banco Olé (Note 2.cb).
(2) Comprised mainly of the goodwill portion allocated to Webmotors.
(3) On July 24, 2019, Banco Santander sold its entire stake in CIBRASEC - Companhia Brasileira de Securitização (“CIBRASEC”), corresponding to 4,000 common shares and 50 preferred shares, to ISEC Securitizadora SA for the amount of R$9,845,611.54. Due to the closing of the transaction, Banco Santander is no longer a shareholder of CIBRASEC.
12. Intangibles
Bank | ||||||||
03/31/2020 | 12/31/2019 | |||||||
Cost | Amortization | Net | Net | |||||
Goodwill on Acquired Companies | 26,481,816 | (26,222,641) | 259,175 | 274,745 | ||||
Other Intangible Assets | 8,558,107 | (4,828,483) | 3,729,624 | 3,777,511 | ||||
Acquisition and Development of Software | 5,013,507 | (3,139,087) | 1,874,420 | 1,851,076 | ||||
Exclusivity Contracts for Provision of Banking Services | 3,338,273 | (1,483,147) | 1,855,126 | 1,926,342 | ||||
Others | 206,327 | (206,249) | 78 | 93 | ||||
Total | 35,039,923 | (31,051,124) | 3,988,799 | 4,052,256 | ||||
Consolidated | ||||||||
03/31/2020 | 12/31/2019 | |||||||
Cost | Amortization | Net | Net | |||||
Goodwill on Acquired Companies | 29,870,982 | (27,464,225) | 2,406,757 | 1,611,812 | ||||
Other Intangible Assets | 9,231,410 | (5,265,660) | 3,965,750 | 4,100,986 | ||||
Acquisition and Development of Software | 5,605,511 | (3,509,381) | 2,096,130 | 2,118,798 | ||||
Exclusivity Contracts for Provision of Banking Services | 3,338,273 | (1,483,147) | 1,855,126 | 1,926,342 | ||||
Others | 287,626 | (273,132) | 14,494 | 55,846 | ||||
Total | 39,102,392 | (32,729,885) | 6,372,507 | 5,712,798 | ||||
(*) For the quarter ended March 31, 2020, there was no impairment.
13. Funding
a) Opening of Equity Accounts
Bank | ||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||
Without Maturity | Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | |||||||
Deposits | 84,385,991 | 69,723,134 | 85,301,097 | 67,820,627 | 307,230,849 | 246,950,548 | ||||||
Demand Deposits | 34,120,100 | - | - | - | 34,120,100 | 29,392,188 | ||||||
Savings Deposits | 50,184,800 | - | - | - | 50,184,800 | 49,039,857 | ||||||
Interbank Deposits | - | 2,845,779 | 3,104,056 | 109,527 | 6,059,362 | 4,673,772 | ||||||
Time Deposits (1) | 81,091 | 66,877,355 | 82,197,041 | 67,711,100 | 216,866,587 | 191,106,349 | ||||||
Money Market Funding | - | 121,947,796 | 7,295,575 | 23,615,431 | 152,858,802 | 129,632,447 | ||||||
Own Portfolio | - | 103,956,290 | 6,891,391 | 240,057 | 111,087,738 | 97,387,683 | ||||||
Government Securities | - | 92,994,156 | 6,887,952 | 240,057 | 100,122,165 | 87,881,427 | ||||||
Debt Securities in Issue | - | 4,102 | - | - | 4,102 | 86,595 | ||||||
Others | - | 10,958,032 | 3,439 | - | 10,961,471 | 9,419,661 | ||||||
Third Parties | - | 11,190,020 | - | - | 11,190,020 | 8,743,348 | ||||||
Linked to Trading Portfolio Operations | - | 6,801,486 | 404,184 | 23,375,374 | 30,581,044 | 23,501,416 | ||||||
Funds from Acceptance and Issuance of Securities | - | 16,280,979 | 36,746,572 | 50,390,302 | 103,417,853 | 91,579,368 | ||||||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 11,922,416 | 26,018,346 | 30,047,025 | 67,987,787 | 68,716,278 | ||||||
Real Estate Credit Notes - LCI (2) | - | 2,572,973 | 7,979,677 | 17,139,527 | 27,692,177 | 24,995,265 | ||||||
Agribusiness Credit Notes - LCA | - | 3,985,502 | 6,504,531 | 3,827,738 | 14,317,771 | 14,776,877 | ||||||
Treasury Bills - LF (3) | - | 5,363,941 | 11,534,138 | 7,707,150 | 24,605,229 | 27,587,340 | ||||||
Guaranteed Real Estate Credit Notes - LIG (4) | - | - | - | 1,372,610 | 1,372,610 | 1,356,796 | ||||||
Securities Issued Abroad | - | 4,184,938 | 8,869,063 | 18,597,263 | 31,651,264 | 19,419,513 | ||||||
Funding by Structured Operations Certificates | - | 173,625 | 1,859,163 | 1,746,014 | 3,778,802 | 3,443,577 | ||||||
Borrowings and Onlendings | - | 24,711,748 | 35,418,725 | 9,498,064 | 69,628,537 | 57,413,704 | ||||||
Foreign Borrowings | - | 23,440,948 | 33,213,375 | 1,725,372 | 58,379,695 | 45,659,127 | ||||||
Import and Export Financing Lines | - | 13,147,102 | 25,964,837 | 539,017 | 39,650,956 | 31,794,109 | ||||||
Other Credit Lines | - | 10,293,846 | 7,248,538 | 1,186,355 | 18,728,739 | 13,865,018 | ||||||
Domestic Onlendings | - | 1,270,800 | 2,205,350 | 7,772,692 | 11,248,842 | 11,754,577 | ||||||
Total | 84,385,991 | 232,663,657 | 164,761,969 | 151,324,424 | 633,136,041 | 525,576,067 | ||||||
Consolidated | ||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||
Without Maturity | Up to 3 Months | From 3 to 12 Months | Over 12 Months | Total | Total | |||||||
Deposits | 84,289,495 | 69,116,945 | 83,864,894 | 66,613,935 | 303,885,269 | 272,927,991 | ||||||
Demand Deposits | 34,023,604 | - | - | - | 34,023,604 | 29,107,534 | ||||||
Savings Deposits | 50,184,800 | - | - | - | 50,184,800 | 49,039,857 | ||||||
Interbank Deposits | - | 2,261,869 | 2,077,363 | 563,356 | 4,902,588 | 4,299,290 | ||||||
Time Deposits (1) | 81,091 | 66,855,076 | 81,787,531 | 66,050,579 | 214,774,277 | 190,344,470 | ||||||
Other Deposits | - | - | - | - | - | 136,840 | ||||||
Money Market Funding | - | 115,850,189 | 7,295,575 | 23,615,432 | 146,761,196 | 123,940,990 | ||||||
Own Portfolio | - | 97,858,683 | 6,891,391 | 240,058 | 104,990,132 | 91,696,225 | ||||||
Government Securities | - | 86,896,549 | 6,887,952 | 240,058 | 94,024,559 | 82,189,969 | ||||||
Debt Securities in Issue | - | 4,102 | - | - | 4,102 | 86,595 | ||||||
Others | - | 10,958,032 | 3,439 | - | 10,961,471 | 9,419,661 | ||||||
Third Parties | - | 11,190,020 | - | - | 11,190,020 | 8,743,348 | ||||||
Linked to Trading Portfolio Operations | - | 6,801,486 | 404,184 | 23,375,374 | 30,581,044 | 23,501,417 | ||||||
Funds from Acceptance and Issuance of Securities | - | 16,340,685 | 31,902,426 | 40,164,891 | 88,408,002 | 85,962,615 | ||||||
Exchange Acceptances | - | 167,217 | 513,374 | 884,593 | 1,565,184 | 1,591,753 | ||||||
Real Estate Credit Notes, Mortgage Notes, Credit and Similar Notes | - | 12,404,922 | 26,861,331 | 32,399,487 | 71,665,740 | 72,211,903 | ||||||
Real Estate Credit Notes - LCI (2) | - | 2,572,973 | 7,979,677 | 17,139,527 | 27,692,177 | 24,995,265 | ||||||
Agribusiness Credit Notes - LCA | - | 3,985,502 | 6,504,531 | 3,827,738 | 14,317,771 | 14,776,877 | ||||||
Treasury Bills - LF (3) | - | 5,846,447 | 12,377,123 | 10,059,612 | 28,283,182 | 31,082,965 | ||||||
Guaranteed Real Estate Credit Notes - LIG (4) | - | - | - | 1,372,610 | 1,372,610 | 1,356,796 | ||||||
Securities Issued Abroad | - | 3,594,921 | 2,668,558 | 5,134,797 | 11,398,276 | 8,715,382 | ||||||
Funding by Structured Operations Certificates | - | 173,625 | 1,859,163 | 1,746,014 | 3,778,802 | 3,443,577 | ||||||
Borrowings and Onlendings | - | 21,861,214 | 35,450,002 | 9,543,315 | 66,854,531 | 54,879,561 | ||||||
Domestic Borrowings | - | 11,816 | 31,277 | 45,251 | 88,344 | 47,388 | ||||||
Foreign Borrowings | - | 20,578,598 | 33,213,375 | 1,725,372 | 55,517,345 | 43,077,596 | ||||||
Import and Export Financing Lines | - | 13,147,102 | 25,964,837 | 539,017 | 39,650,956 | 31,794,109 | ||||||
Other Credit Lines | - | 7,431,496 | 7,248,538 | 1,186,355 | 15,866,389 | 11,283,487 | ||||||
Domestic Onlendings | - | 1,270,800 | 2,205,350 | 7,772,692 | 11,248,842 | 11,754,577 | ||||||
Total | 84,289,495 | 223,169,033 | 158,512,897 | 139,937,573 | 605,908,998 | 537,711,157 | ||||||
(1) Consider the maturities established in the respective applications, with the possibility of immediate withdrawal, in advance of their maturity.
(2) Letters of real estate credit are fixed income securities backed by real estate credits and guaranteed by mortgage or fiduciary alienation of real estate. As of March 31, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2026).
(3) The main characteristics of the financial bills are a minimum term of two years, a minimum nominal value of R$300 and an early redemption permit of only 5% of the amount issued. As of March 31, 2020, they have a maturity between 2020 and 2025 (12/31/2019 - with a maturity between 2020 and 2025).
(4) Guaranteed Real Estate Bills are fixed income securities backed by real estate credits guaranteed by the issuer and a pool of real estate credits apart from the other assets of the issuer. As of March 31, 2020, they have a term between 2021 and 2023 (12/31/2019 - with a term between 2021 and 2022).
At the Bank and Consolidated, the export and import financing lines are funds raised from financial institutions abroad, intended for investment in commercial exchange operations, related to discounting export bills and pre-financing for export and import, whose maturities are up to the year 2023 (12/31/2019 - until the year 2023) and are subject to financial charges, corresponding to the exchange variation plus interest that vary from 0.28% pa to 3.70% p.a (12/31/2019 - from 0.28% per annum to 3.8% p.a).
Country onlending obligations - official institutions incur financial charges corresponding to TJLP, exchange variation of the BNDES currency basket or exchange variation of the US dollar, plus interest, in accordance with the operational policies of the BNDES System.
b) Opening profit and loss accounts
Bank | Consolidated | |||
01/01 to 03/31/2020 | 01/01 to 03/31/2019 | 01/01 to 03/31/2020 | 01/01 to 03/31/2019 | |
Time Deposits (1) (2) | 6,115,124 | 2,037,478 | 6,297,600 | 2,037,940 |
Savings Deposits | 416,735 | 527,368 | 416,735 | 527,368 |
Interbank Deposits | 51,050 | 141,225 | 42,744 | 49,040 |
Money Market Funding | 2,704,876 | 2,824,119 | 2,646,575 | 2,753,907 |
Upgrade and Provisions Interest and Pension Plans and Capitalization | - | - | 32,562 | 29,560 |
Acceptance and Issuance of Securities | 19,497,643 | 1,769,545 | 19,535,767 | 1,829,305 |
Others (3) | 159,765 | 422,074 | 176,834 | 436,855 |
Total | 28,945,193 | 7,721,809 | 29,148,817 | 7,663,975 |
(1) In the Bank and in the Consolidated, it includes the registration of interest in the amount of R$212,087 (2019 - R$157,770), referring to the issuance of Level I and II Eligible Debt Instrument (Note 14).
(2) Includes exchange variation expense of R$1,373,724 in the Bank and Consolidated (2019 - exchange variation expense of R$296,717 in the Bank and Consolidated).
(3) Includes exchange variation expense in the amount of R$17,027,934 in the Bank and in the Consolidated (2019 - exchange variation expense in the amount of R$499,447 in the Bank and in the Consolidated).
14. Debt Instruments Eligible to Capital
The details of the balance of the item Debt Instruments Eligible to Capital referring to the issuance of equity instruments to compose Level I and Level II of the PR due to the Capital Optimization Plan, are as follows:
Bank/Consolidated | ||||||||||||
03/31/2020 | 12/31/2019 | |||||||||||
Debt Instruments Eligible to Compose Capital | Issuance | Maturity | Amount (Million) | Interest Rate (p.a.) (1) | Total | Total | ||||||
Tier I (2) | November - 18 | No Maturity (Perpetual) | US$1.250 | 7.25% | 6,685,519 | 5,092,153 | ||||||
Tier II (2) | November - 18 | November - 28 | US$1.250 | 6.13% | 6,656,480 | 5,083,808 | ||||||
Total | 13,341,999 | 10,175,961 |
(1) Interest paid semi-annually, as of May 8, 2019.
(2) The issues were made through the Cayman Agency and there is no incidence of Income Tax at Source.
Notes have the following common characteristics:
(a) Unit value of at least US$150 thousand and in integral multiples of US$1 thousand in excess of such minimum value;
(b) The Notes may be repurchased or redeemed by Banco Santander after the 5th (fifth) anniversary from the date of issue of the Notes, at the Bank's sole discretion or due to changes in the tax legislation applicable to the Notes; or at any time, due to the occurrence of certain regulatory events.
15. Other Payables – Other
Bank | Consolidated | ||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | ||||
Provision Technical for Capitalization Operations | - | - | 2,543,642 | 2,402,614 | |||
Provision Technical for Pension Operations | - | - | 1,754,016 | 1,901,721 | |||
Payables for Credit Cards | 24,052,239 | 27,526,591 | 32,061,256 | 36,188,873 | |||
Provision for Tax Risks and Legal Obligations (Note 16.b) (2) | 4,356,456 | 4,346,769 | 6,644,973 | 6,630,722 | |||
Provision for Legal and Administrative Proceedings - | 6,249,485 | 6,179,885 | 6,794,103 | 6,739,988 | |||
Provision for Financial Guarantees (Note 15.a) | 169,952 | 166,105 | 169,952 | 166,105 | |||
Employee Benefit Plans | 3,950,035 | 4,901,691 | 3,994,940 | 4,956,851 | |||
Payables for Acquisition of Assets and Rights | 23,034 | 23,034 | 23,034 | 23,034 | |||
Reserve for Tax Contingencies - Responsibility of | 103,829 | 102,482 | 103,829 | 102,482 | |||
Reserve for Legal and Administrative Proceedings - Responsibility of | 852 | 791 | 852 | 791 | |||
Accrued Liabilities | |||||||
Personnel Expenses | 1,261,056 | 1,697,771 | 1,449,230 | 1,960,884 | |||
Administrative Expenses | 384,915 | 388,954 | 530,040 | 593,593 | |||
Others Payments | 39,820 | 40,179 | 962,454 | 135,235 | |||
Creditors for Unreleased Funds | 987,661 | 1,188,637 | 987,661 | 1,188,637 | |||
Provision of Payment Services | 552,653 | 580,988 | 552,653 | 580,988 | |||
Suppliers | 713,551 | 437,208 | 1,484,516 | 1,242,839 | |||
Others (1) | 7,527,060 | 6,088,000 | 10,884,493 | 9,571,481 | |||
Total | 50,372,598 | 53,669,085 | 70,941,644 | 74,386,838 |
(1) Includes impacts of the exchange variation referring to Notes.
(2) In the first half of 2019, the Bank entered into an agreement with a former controller where the registered obligations became the responsibility of the Bank, with no impact on results (Notes 15 and 16.i).
(3) In March 2020, the Bank reassessed its actuarial obligations related to the supplementary retirement plans (Banesprev II, Banesprev V and Banesprev Pré-75) and the other post-employment health and dental care plans due to a significant fluctuation in the interest rates occurred since the last revaluation, in December 2019. With this remeasurement, there was a gross reduction in actuarial obligations in the amount of R$977,488 in the Bank and R$988,128 in the Consolidated, as a contra entry to Equity Valuation Adjustments - Shareholders' Equity.
a) Provision for Financial Guarantees
The classification of the guarantees operations for the constitution of provision is based on the estimate of the involved risk. It happens due to the quality evaluation process applied to the clients and operations, using statistical model based on quantitative and qualitative information or on specialized credit analyst, which allow them to be classified according their default probabilities, based on internal and market´s objective variables (bureaus), previously identified as predictive of default probability. After this evaluation, the operations are classified according to the provisioning ratings, having as reference the CMN Resolution nº 2,682/1999. Based on the results of this analysis, amounts related to operations’ coverage are registered as provision considering the type of the guarantee, according to the requirements of CMN Resolution nº 4,512/2016.
Bank/Consolidated | ||||||||
03/31/2020 | 12/31/2019 | |||||||
Type of Financial Guarantee | Balance Guarantees Provided | Provision | Balance Guarantees Provided | Provision | ||||
Linked to International Merchandise Trade | 1,519,117 | 4,154 | 439,507 | 3,017 | ||||
Linked to Bids, Auctions, Provision of Services or Execution of Works | 4,976,514 | 4,056 | 5,243,996 | 4,426 | ||||
Linked to the Supply of Goods | 1,416,044 | 2,264 | 1,488,371 | 2,602 | ||||
Linked to the Distribution of Securities by Public Offer | 250,000 | - | 340,000 | - | ||||
Guarantee in Legal and Administrative Proceedings of Fiscal Nature | 13,084,964 | 107,072 | 12,934,282 | 107,231 | ||||
Other Guarantees | 383,108 | 1,843 | 276,506 | 1,334 | ||||
Other Bank Guarantees | 15,042,197 | 37,267 | 13,944,007 | 37,585 | ||||
Other Financial Guarantees | 4,672,862 | 13,296 | 3,600,051 | 9,910 | ||||
Total | 41,344,805 | 169,952 | 38,266,720 | 166,105 | ||||
Changes in Allowances for Financial Guarantees
Bank/Consolidated | ||||||||
01/01 a 03/31/2020 | 01/01 a 03/31/2019 | |||||||
Balance at Beginning | 166,105 | 201,411 | ||||||
Constitution (Note 30) | 5,043 | 5,361 | ||||||
Reversal (1) (Note 30) | (1,196) | (2,458) | ||||||
Balance at End | 169,952 | 204,314 |
(1) Corresponds to the honored bond, change in rating and provision recorded in the allowance for doubtful accounts.
16. Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security
a) Contingent Assets
In the Bank and Consolidated, on March 31, 2020 and December 31, 2019, no contingent assets were registered (Note 3).
b) Balance Sheet of Provisions for Judicial and Administrative Proceedings and Legal Obligations by Nature
Bank | Consolidated | ||||||||
03/31/2020 | 12/31/2019 | 03/31/2020 | 12/31/2019 | ||||||
Reserve for Tax Contingencies and Legal Obligations (Note 15) | 4,356,456 | 4,346,769 | 6,644,973 | 6,630,722 | |||||
Accrual for Legal and Administrative Proceedings - Labor and Civil (Note 15) | 6,249,485 | 6,179,885 | 6,794,103 | 6,739,988 | |||||
Labor | 3,272,352 | 3,216,008 | 3,564,330 | 3,517,431 | |||||
Civil | 2,977,133 | 2,963,877 | 3,229,773 | 3,222,557 | |||||
Total | 10,605,941 | 10,526,654 | 13,439,076 | 13,370,710 | |||||
c) Change in Accrual for Judicial and Administrative Proceedings and Legal Obligations
Bank | ||||||||||||
01/01 a | 01/01 a | |||||||||||
Tax | Labor | Civil | Tax | Labor | Civil | |||||||
Balance at Beginning | 4,346,769 | 3,216,008 | 2,963,877 | 4,079,141 | 3,543,801 | 3,144,599 | ||||||
Recognition Net of Reversal (1) (3) | (8,703) | 254,734 | 63,998 | (6,975) | 7,096 | 32,928 | ||||||
Inflation Adjustment | 31,654 | 19,731 | 70,116 | 35,603 | 20,351 | 69,499 | ||||||
Write-offs Due to Payment | (13,264) | (218,121) | (120,858) | (51,088) | (107,547) | (130,124) | ||||||
Balance at End | 4,356,456 | 3,272,352 | 2,977,133 | 4,056,681 | 3,463,701 | 3,116,902 | ||||||
Escrow Deposits - Other Receivables | 1,593,185 | 1,128,455 | 629,191 | 1,360,086 | 1,176,606 | 609,647 | ||||||
Escrow Deposits - Securities | 8,353 | 20,126 | 19,294 | 17,269 | 19,755 | 25,366 | ||||||
Total Escrow Deposits (2) | 1,601,538 | 1,148,581 | 648,485 | 1,377,355 | 1,196,361 | 635,013 | ||||||
Consolidated | ||||||||||||
01/01 a | 01/01 a | |||||||||||
Tax | Labor | Civil | Tax | Labor | Civil | |||||||
Balance at Beginning | 6,630,722 | 3,517,431 | 3,222,557 | 6,294,007 | 3,829,975 | 3,401,483 | ||||||
Recognition Net of Reversal (1) (3) |