Docoh
Loading...

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


 

Performance Review.. 3

Balance Sheet 10

Income Statements. 14

Comprehensive Income Statements. 15

Statements of Changes in Stockholders' Equity – Bank. 16

Statements of Changes in Stockholders' Equity – Consolidated. 17

Cash Flows Statements. 19

Statements of Value Added. 20

1.General Information. 21

2.Presentation of Financial Statements. 21

3.Significant Accounting Policies. 25

4.Cash and Cash Equivalents. 25

5.Interbank Investments. 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

12.Intangibles. 48

13.Funding. 48

14.Debt Instruments Eligible to Capital 50

15.Other Payables – Other 50

16.Provisions, Contingent Assets and Liabilities and Legal Obligations - Tax and Social Security. 51

17.Stockholders’ Equity. 55

18.Related Parties. 57

19.Income from Services Rendered and Banking Fees. 63

20.Personnel Expenses. 63

21.Other Administrative Expenses. 63

22.Other Operating Income. 63

23.Other Operating Expenses. 63

24.Non-Operating Income. 64

25.Employee Benefit Plans - Post-Employment Benefits. 64

26.Risk Management, Capital and Sensitivity Analysis. 66

27.Other information. 69

28.Subsequent Event 70

Composition of Management Bodies. 71

Declaration of directors on the financial statements. 73

Directors' Statement on Independent Auditors. 75

 

 



graphic_image001.jpg

*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
and the subsidiary Santander Brasil EFC
(R$ Million)

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
(R$ Millions)

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
Income

Loan
Portfolio (1)

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).



 

graphic_image003.jpggraphic_image003.jpg

 

 

graphic_image005.jpggraphic_image005.jpg

 

 

 

 

 

 



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%

 


graphic_image006.jpg

*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


National Treasury Notes - NTN

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
03/31/2020

01/01 a
03/31/2019

01/01 a
03/31/2020

01/01 a
03/31/2019

01/01 a
03/31/2020

01/01 a
03/31/2019

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  -
  Labor and Civil (Note 16.b) (2)

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
  Former Controllers (Note 16.i) (b)

103,829

102,482

103,829

102,482

Reserve for Legal and Administrative Proceedings - Responsibility of
   Former Controllers Stockholders (Note 16.i) (b)

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
03/31/2020

01/01 a
03/31/2019

Tax

Labor

Civil

Tax

Labor

Civil

Balance at Beginning

4,346,769

3,216,008

2,963,877

4,079,141

3,543,801

3,144,599

Recognition Net of Reversal (1) (3)

(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
03/31/2020

01/01 a
03/31/2019

Tax

Labor

Civil

Tax

Labor

Civil

Balance at Beginning

6,630,722

3,517,431

3,222,557

6,294,007

3,829,975

3,401,483

Recognition Net of Reversal (1) (3)