Note 21 – Stockholders’ equity
a) Capital
The Extraordinary Stockholders’ Meeting held on September 14, 2016 approved the increase of subscribed and paid-up capital by R$ 12,000, by capitalizing of the amounts recorded in Revenue Reserve – Statutory Reserve, with a 10% bonus shares. Bonus shares started being traded on October 21, 2016 and the process was approved by the Central Bank of Brazil on September 23, 2016. Accordingly, capital stock was increased by 598,391,594 shares.
The Extraordinary Stockholders` Meeting of April 27, 2016 approved the cancellation of 100,000,000 preferred shares of own issue held in treasury, without change to the capital stock by capitalizing amounts recorded in Revenue Reserves – Statutory Reserve. This process was approved by the Central Bank of Brazil on June 7, 2016.
At the Meeting of the Board of Directors held on December 15, 2017, the cancellation of 31,793,105 common shares of own issue and held in treasury was approved, with no change in capital, upon capitation of the amounts recorded in Revenue Reserves – Statutory Reserve.
As a result of this last cancellation, capital is represented by 6,550,514,438 book-entry shares with no par value, of which 3,319,951,112 are common and 3,230,563,326 are preferred shares with no voting rights, but with tag-along rights, in the event of disposal of control, to be included in a public offering of shares, so as to ensure the price equal to eight per cent (80%) of the amount paid per share with voting rights in the controlling stake, as well as a dividend at least equal to that of the common shares. Capital amounts to R$ 97,148 (R$ 97,148 at December 31, 2016), of which R$ 65,482 (R$ 65,534 at December 31, 2016) refers to stockholders domiciled in the country and R$ 31,666 (R$ 31,614 at December 31, 2016) refers to stockholders domiciled abroad. The consequent statutory change in the number of shares will be resolved in the next Annual Stockholders’ Meeting.
The table below shows the breakdown of and change in shares of paid-in capital and the reconciliation of balances at the beginning and end of the period:
| 12/31/2017 | ||||||||||||||||
| Number | ||||||||||||||||
| Common | Preferred | Total | Amount | |||||||||||||
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Residents in Brazil at 12/31/2016 |
3,335,350,311 | 1,104,963,731 | 4,440,314,042 | |||||||||||||
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Residents abroad at 12/31/2016 |
16,393,906 | 2,125,599,595 | 2,141,993,501 | |||||||||||||
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Shares of capital stock at 12/31/2016 |
3,351,744,217 | 3,230,563,326 | 6,582,307,543 | |||||||||||||
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(-) Cancellation of Shares – Meeting of the Board of Directors December 15, 2017 |
(31,793,105 | ) | — | (31,793,105 | ) | |||||||||||
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Shares of capital stock at 12/31/2017 |
3,319,951,112 | 3,230,563,326 | 6,550,514,438 | |||||||||||||
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Residents in Brazil at 12/31/2017 |
3,299,073,506 | 1,116,291,341 | 4,415,364,847 | |||||||||||||
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Residents abroad at 12/31/2017 |
20,877,606 | 2,114,271,985 | 2,135,149,591 | |||||||||||||
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Treasury shares at 12/31/2016 (1) |
3,074 | 69,604,462 | 69,607,536 | (1,882 | ) | |||||||||||
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Purchase of shares |
46,214,237 | 37,982,900 | 84,197,137 | (3,089 | ) | |||||||||||
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Exercised options – granting of stock options |
— | (28,008,923 | ) | (28,008,923 | ) | 728 | ||||||||||
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Disposals – stock option plan |
— | (8,118,725 | ) | (8,118,725 | ) | 322 | ||||||||||
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(-) Cancellation of Shares – Meeting of the Board of Directors December 15, 2017 |
(31,793,105 | ) | — | (31,793,105 | ) | 1,178 | ||||||||||
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Treasury shares at 12/31/2017 (1) |
14,424,206 | 71,459,714 | 85,883,920 | (2,743 | ) | |||||||||||
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Outstanding shares at 12/31/2017 |
3,305,526,906 | 3,159,103,612 | 6,464,630,518 | |||||||||||||
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Outstanding shares at 12/31/2016 |
3,351,741,143 | 3,160,958,864 | 6,512,700,007 | |||||||||||||
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| 12/31/2016 | ||||||||||||||||
| Number | ||||||||||||||||
| Common | Preferred | Total | Amount | |||||||||||||
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Residents in Brazil at 12/31/2015 |
3,033,657,386 | 1,130,776,196 | 4,164,433,582 | |||||||||||||
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Residents abroad at 12/31/2015 |
13,382,812 | 1,906,099,555 | 1,919,482,367 | |||||||||||||
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Shares of capital stock at 12/31/2015 |
3,047,040,198 | 3,036,875,751 | 6,083,915,949 | |||||||||||||
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(-) Cancellation of shares—ESM of April 27, 2016 – Approved on June 7, 2016 |
— | (100,000,000 | ) | (100,000,000 | ) | |||||||||||
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Bonus Shares—ESM of 09/14/2016—Carried out at 09/23/2016 |
304,704,019 | 293,687,575 | 598,391,594 | |||||||||||||
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Shares of capital stock at 12/31/2016 |
3,351,744,217 | 3,230,563,326 | 6,582,307,543 | |||||||||||||
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Residents in Brazil at 12/31/2016 |
3,335,350,311 | 1,104,963,731 | 4,440,314,042 | |||||||||||||
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Residents abroad at 12/31/2016 |
16,393,906 | 2,125,599,595 | 2,141,993,501 | |||||||||||||
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Treasury shares at 12/31/2015 (1) |
2,795 | 162,562,650 | 162,565,445 | (4,353 | ) | |||||||||||
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Purchase of shares |
— | 30,640,000 | 30,640,000 | (947 | ) | |||||||||||
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Exercised options—granting of stock options |
— | (19,931,626 | ) | (19,931,626 | ) | 315 | ||||||||||
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Disposals – stock option plan |
— | (8,293,957 | ) | (8,293,957 | ) | 433 | ||||||||||
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(-) Cancellation of shares—ESM of April 27, 2016 – Approved on June 7, 2016 |
— | (100,000,000 | ) | (100,000,000 | ) | 2,670 | ||||||||||
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Bonus Shares—ESM of 09/14/2016—Carried out at 09/23/2016 |
279 | 4,627,395 | 4,627,674 | — | ||||||||||||
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Treasury shares at 12/31/2016 (1) |
3,074 | 69,604,462 | 69,607,536 | (1,882 | ) | |||||||||||
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Outstanding shares at 12/31/2016 |
3,351,741,143 | 3,160,958,864 | 6,512,700,007 | |||||||||||||
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Outstanding shares at 12/31/2015 (2) |
3,351,741,143 | 3,161,744,411 | 6,513,485,554 | |||||||||||||
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| (1) | Own shares, purchased based on authorization of the Board of Directors, to be held in Treasury for subsequent cancellation of replacement in the market. |
| (2) | For better comparability, outstanding shares were adjusted to reflect the bonuses of 09/23/2016. |
We detail below of the cost of shares purchased in the period, as well the average cost of treasury shares and their market price (in Brazilian Reais per share):
| 01/01 to 12/31/2017 | ||||||||
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Cost / market value |
Common | Preferred | ||||||
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Minimum |
37.06 | 33.48 | ||||||
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Weighted average |
37.06 | 36.25 | ||||||
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Maximum |
37.06 | 38.56 | ||||||
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Treasury shares |
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Average cost |
37.05 | 30.90 | ||||||
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Market value at 12/31/2017 |
37.69 | 42.58 | ||||||
| 01/01 to 12/31/2016 | ||||||||
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Cost / market value |
Common | Preferred | ||||||
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Minimum |
— | 23.79 | ||||||
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Weighted average |
— | 30.13 | ||||||
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Maximum |
— | 36.05 | ||||||
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Treasury shares |
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Average cost |
6.59 | 27.04 | ||||||
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Market value at 12/31/2016 |
30.00 | 33.85 | ||||||
| b) | Dividends |
Stockholders are entitled to an annual mandatory dividend of not less than 25% of adjusted profit, pursuant to the provisions of the Brazilian Corporate Law. Both common and preferred shares participate equally, after common shares have received dividends equal to the annual minimum priority dividend of R$ 0.022 per share non-cumulative to be paid to preferred shares.
The calculation of the monthly advance of the mandatory minimum dividend is based on the share position on the last day of the prior month, with payment being made on the first business day of the subsequent month, amounting to R$ 0.015 per share.
Below is a statement from dividends and interest on equity and the calculation of the minimum mandatory dividend:
Calculation of dividends and interest on capital
| 12/31/2017 | 12/31/2016 | 12/31/2015 | ||||||||||
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Statutory net income |
21,108 | 18,853 | 21,084 | |||||||||
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Adjustments: |
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(-) Legal reserve |
(1,055 | ) | (943 | ) | (1,054 | ) | ||||||
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Dividend calculation basis |
20,053 | 17,910 | 20,030 | |||||||||
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Mandatory dividend |
5,013 | 4,478 | 5,007 | |||||||||
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Dividends and Interest on Capital Paid / Provided for / Identified |
17,558 | 10,000 | 7,305 | |||||||||
Stockholders’ compensation
| 12/31/2017 | ||||||||||||
| Gross | WHT | Net | ||||||||||
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Paid / prepaid |
3,666 | (389 | ) | 3,277 | ||||||||
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Dividends—11 monthly installments of R$ 0.015 per share paid from February to December 2017 |
1,074 | — | 1,074 | |||||||||
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Interest on capital—R$ 0.3990 per share paid on 08/25/2017 |
2,592 | (389 | ) | 2,203 | ||||||||
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Provided for (Recorded in Other Liabilities) |
1,877 | (140 | ) | 1,737 | ||||||||
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Dividends—1 monthly installment of R$ 0.015 per share paid on 01/02/2018 |
98 | — | 98 | |||||||||
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Dividends provision—R$ 0.1304 per share |
843 | — | 843 | |||||||||
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Interest on capital—R$ 0.1445 per share, credited on 12/28/2017, paid by 04/30/2018 |
936 | (140 | ) | 796 | ||||||||
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Identified in Revenue Reserve In Stockholders’ Equity—R$ 2.1126 per share |
13,658 | (1,114 | ) | 12,544 | ||||||||
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Total from 01/01 to 12/31/2017 |
19,201 | (1,643 | ) | 17,558 | ||||||||
| 12/31/2016 | ||||||||||||
| Gross | WHT | Net | ||||||||||
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Paid / prepaid |
3,355 | (355 | ) | 3,000 | ||||||||
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Dividends—11 monthly installments of R$ 0.015 per share paid from February to December 2016 |
987 | — | 987 | |||||||||
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Interest on capital—R$ 0.3990 per share paid on 08/25/2016 |
2,368 | (355 | ) | 2,013 | ||||||||
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Declared until 12/31/2016 (Recorded in Other Liabilities) |
3,169 | (461 | ) | 2,708 | ||||||||
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Dividends—1 monthly installment of R$ 0.015 per share paid on 01/02/2017 |
98 | — | 98 | |||||||||
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Interest on capital—R$ 0.4714 per share, credited on 12/30/2016, paid by 04/28/2017 |
3,071 | (461 | ) | 2,610 | ||||||||
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Identified in Revenue Reserve In Stockholders’ Equity—R$ 0.7754 per share |
5,050 | (758 | ) | 4,292 | ||||||||
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Total from 01/01 to 12/31/2016 |
11,574 | (1,574 | ) | 10,000 | ||||||||
| 12/31/2015 | ||||||||||||
| Gross | WHT | Net | ||||||||||
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Paid / prepaid |
3,002 | (311 | ) | 2,691 | ||||||||
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Dividends—11 monthly installments of R$ 0.015 per share paid from February to December 2015 |
932 | — | 932 | |||||||||
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Interest on capital—R$ 0.3460 per share paid on 08/25/2015 |
2,070 | (311 | ) | 1,759 | ||||||||
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Declared until 12/31/2015 (recorded in other liabilities) |
2,502 | (186 | ) | 2,316 | ||||||||
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Dividends—1 monthly installment of R$ 0.015 per share paid on 01/04/2016 |
89 | — | 89 | |||||||||
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Interest on capital—R$ 0.1980 per share |
1,173 | — | 1,173 | |||||||||
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Interest on capital—R$ 0.2090 per share, credited on 12/30/2015, paid on 04/30/2016 |
1,240 | (186 | ) | 1,054 | ||||||||
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Identified in Revenue Reserve In Stockholders’ Equity—R$ 0.4564 per share |
2,703 | (405 | ) | 2,298 | ||||||||
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Total from 01/01 to 12/31/2015 |
8,207 | (902 | ) | 7,305 | ||||||||
| c) | Additional paid-in capital |
Additional paid-in capital corresponds to: (i) the difference between the proceeds from the sale of treasury shares and the average cost of such shares, and (ii) the compensation expenses recognized in accordance with the stock option plan and variable compensation.
| d) | Appropriated reserves |
| 12/31/2017 | 12/31/2016 | 12/31/2015 | ||||||||||
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Capital reserves (1) |
285 | 285 | 285 | |||||||||
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Premium on subscription of shares |
284 | 284 | 284 | |||||||||
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Reserves from tax incentives, restatement of equity securities and other |
1 | 1 | 1 | |||||||||
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Revenue reserves |
12,214 | 3,158 | 9,782 | |||||||||
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Legal (2) |
8,893 | 7,838 | 6,895 | |||||||||
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Statutory |
588 | 1,132 | 9,461 | |||||||||
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Dividends equalization (3) |
499 | 337 | 3,355 | |||||||||
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Working capital increase (4) |
— | — | 1,655 | |||||||||
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Increase in capital of investees (5) |
89 | 795 | 4,451 | |||||||||
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Corporate reorganizations (Note 2.4 a III) |
(10,925 | ) | (10,862 | ) | (9,277 | ) | ||||||
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Unrealized profits (6) |
13,658 | 5,050 | 2,703 | |||||||||
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Total reserves at parent company |
12,499 | 3,443 | 10,067 | |||||||||
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| (1) | Refers to amounts received by Itaú Unibanco Holding that were not included in the statement of income, since they do not refer to compensation for the provision of goods or services. |
| (2) | Legal reserve—may be used to increase capital or to absorb losses, but it cannot be distributed as dividends. |
| (3) | Reserve for dividends equalization—its purpose is to reserve funds for the payment or advances on dividends, including interest on capital, to maintain the flow of the stockholders’ compensation. |
| (4) | Reserve for working capital—its purpose is to guarantee funds for operations. |
| (5) | Reserve for increase in capital of investees—its purpose is to guarantee the preemptive right in the capital increases of investees. |
| (6) | Refers to Interest on capital provided for up to December 31 for each period, in compliance with BACEN Circular Letter nº 3,516, of July 21, 2011. |
| e) | Unappropriated reserves |
Refers to balance of profit remaining after the distribution of dividends and appropriations to statutory reserves in the statutory accounts of ITAÚ UNIBANCO HOLDING.
| f) | Non-controlling interests |
| Stockholders’ equity | Net Income | |||||||||||||||
| 12/31/2017 | 12/31/2016 | 01/01 to | 01/01 to | |||||||||||||
| 12/31/2017 | 12/31/2016 | |||||||||||||||
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Itaú CorpBanca (Note 3) |
11,255 | 10,117 | 219 | 119 | ||||||||||||
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Itaú Corpbanca Colombia S.A. (Note 3) |
1,198 | 1,231 | (41 | ) | 22 | |||||||||||
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Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento |
327 | 519 | 92 | 119 | ||||||||||||
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Banco Itaú Consignado S.A. |
— | — | — | (20 | ) | |||||||||||
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Luizacred S.A. Soc. De Crédito, Financiamento e Investimento |
294 | 275 | 69 | 51 | ||||||||||||
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Others |
92 | 90 | 26 | 28 | ||||||||||||
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Total |
13,166 | 12,232 | 365 | 319 | ||||||||||||
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