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Banco Ita Holding Financeira S.A. Presentation to: UBS Global Financial Services Conference Alfredo Setubal Investor Relations Director Silvio de Carvalho – PowerPoint PPT presentation

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Title: Presentation to: UBS Global Financial Services Conference


1
Presentation toUBS Global Financial Services
Conference
Banco Itaú Holding Financeira S.A.
  • Alfredo Setubal
  • Investor Relations Director

Silvio de Carvalho Executive Director
May 10-12, 2004
2
Banco Itaú Holding Financeira S.A.
Stockholders Equity, Net Income and Market
Capitalization
R Million
March 2004 Net Income R 876 million Stockholders
Equity R 12,478 million Market
Capitalization R 31,227 million
3
Banco Itaú Holding Financeira S.A.
Points of Sale
mar/04
4
Banco Itaú Holding Financeira S.A.
Internet Banking
1st Quarter 2004 Transactions 128
million Customers 3.3 million
5
Banco Itaú Holding Financeira S.A.
Growth in number of CustomersWith acquisitions
In Million
6
Agenda
  • Results - Banco Itaú Holding Financeira
  • Results - Banco Itaú
  • Results - Banco Itaú BBA
  • Important Facts - Banco Itaú Holding Financeira

7
Banco Itaú Holding Financeira S.A.
Brazilian Scenario
  • Sustained Stability
  • Control of inflation through monetary policy
  • Adjustment in the external accounts
  • Fiscal Austerity
  • Measures taken for Generating Growth
  • Gradual decline in interest rates (SELIC)
  • Continuing trade balance surplus
  • Primary Surplus
  • Change in the public debt profile reduction in
    foreign currency exposure
  • Enhanced government payment capacity
  • Other initiatives Social Security Reform, Reform
    of the Judiciary System and Tax Reform, the
    Bankruptcy Law, new rules for home mortgage
    finance, new regulatory framework for the
    electricity sector

8
Banco Itaú Holding Financeira S.A.
  • Business
  • Personal credit consortium, credit cards and
    vehicle financing
  • Small Business Retail - UPJ and Middle Market

Concentration on businesses with a greater spread
Credit
Dilution of Business Risk and Diversification
  • Equilibrium between Private and Public Securities

Treasury
  • Acquisitions of New Businesses
  • Share Buyback Program
  • Dividends

New opportunities
High level of capitalization
  • Emphasis on Life and Pension Plans
  • Market leader in home insurance

Insurance, Capitalization and Private Pension
Plans
Focus on Profitability
  • New London Branch
  • Financing of Brazilian companies overseas

International Presence (US 2.4 bi)
Support for Trade Finance operations
9
Banco Itaú Holding Financeira S.A.
  • Controls

Cost Reduction/ Administrative Expenses
  • Zero Base Budget
  • Internal Campaign How much does it Cost?
  • Rational use of available resources

Risk Management
  • Monitoring
  • Preparation of database for Basel II

Allocated Capital
  • Sophisticated Management Models
  • Fixing Return on Allocated Capital adjusted to
    the risk of each company

Corporate Governance
  • Best Market Practices
  • Control Audit, Disclosure, Negotiation
    Committees and Advisory Boards
  • Increased independence (new outside board members)

10
Banco Itaú Holding Financeira S.A.
  • Results
  • 1. Sustainable result in the quarter
    (diversification of income sources), with little
    influence of non-recurrent items
  • Efficiency Ratio below 50 for the 6th
    consecutive quarter (strict cost control)
  • Consistent growth of banking service fee revenue
    above IGP-M.
  • 2. Conservative Account Procedures
  • Exceeding Provision for Loan Losses R 1 billion
    (Mar. 31, 04)
  • Market x Book Value R 2.9 billion (Mar. 31,
    04), mainly Securities (R 1.5 billion) and BPI
    (R 700 million)
  • Unrecognized tax credits amounted to the limit
    (R 234 million).

3. Growth in credit portfolio companies (micro,
small and medium-sized companies) and retail 4.
Reduction in credit portfolio non-performing loan
ratio (4)
5. Solvency Ratio (BIS Ratio) above minimum
required (19.8 - March 31 2004) 6. Largest
Market Capitalization among Latin American banks
(R 31.2 billion) 7. Growth in Monthly Dividends
R 0.13 to R 0.17 per one thousand shares
11
Banco Itaú Holding Financeira S.A.
Highlights
R Million (Except where indicated)
4th Q./03
1st Q./04
1st Q./03
714 6.26 9,983 31.8 113,098 2.5 2,965 19,998 19.
7 40.8 4.2
876 7.68 12,478 31.2 126,979 2.8 2,426 31,277 19
.8 48.8 4.0
Net Income Net Income per 1,000
shares Stockholders Equity ROE () Total
Assets ROA () Net Interest Margin Market
Capitalization BIS Ratio () Efficiency Ratio
() NPL Ratio ()
854 7.49 11,879 32.0 118,738 2.9 2,754 30,453 19
.8 49.5 4.1
12
Banco Itaú Holding Financeira S.A.
Financial Ratios
13
Banco Itaú Holding Financeira S.A.
Asset Evolution
R Million
CAGR 23.3
14
Banco Itaú Holding Financeira S.A.
Credit Operations
R Million
CAGR 20.4
Dec.03
Mar.04
Loan Operations Lease Operations Credit
Cards AEC Other Sub-total Guarantees Total
32,418 1,294 3,171 1,622 153 38,689 5,923 44,581
32,698 1,571 2,959 1,509 134 38,871 5,885 44,756
CAGR 21.4
() March 31, 2004
15
Banco Itaú Holding Financeira S.A.
Credit Operations ()
R Million
Var Mar/04 x Dec/03
Mar 31, 04
Mar 31, 03
Dec 31, 03
Var Mar/04 x Mar/03
Corporate Small and Medium- Sized
Companies Individuals Subtotal Real Estate
Financing Total
24,442 7,312 12,369 19,681 2,267 46,390
-2.6 11.7 4.2 6.9 -3.4 1.6
21,771 7,900 13,089 20,989 1,997 44,
756
22,357 7,074 () 12,563 19,637 2,066 (
) 44,061
-10.9 8.0 5.8 6.6 -11.9 -3.5
() Endorsements and Sureties included. () The
values of Dec. 31, 03 were adjusted excluding R
520 million in loans made on 12/18/2003 to Rio de
Janeiros public employees, which were totally
settled on 01/05/2004.
16
Banco Itaú Holding Financeira S.A.
Credit Operations by Currency ()
In Billion
R 46.4
R 44.8
R 44.6
R 44.6
R 42.7
(US 4.3)
(US 4.1)
(US 4.6)
(US 4.5)
(US 4.7)
() Endorsements and Sureties included.
17
Banco Itaú Holding Financeira S.A.
Provision for Loan Losses
R Million
Total Provision
Exceeding Provision
Minimum Provision
18
Banco Itaú Holding Financeira S.A.
Nonperforming Loans and Coverage Ratio
() Provision Balance / Total Nonperforming
Loans
19
Banco Itaú Holding Financeira S.A.
Banking Service Fees
R Million
1st Q./04
4th Q./03
1st Q./03
335 18 88 259 37 59 144 250 24 128 1,343
282 1 73 247 46 49 133 236 29 116 1,212
Mutual Fund Management Fees Administration of
Consortium Collection Current Account
Services Tax Collection Interbank Fees Credit
Operations Credit Cards Income from Guarantees
Provided Other Services Total
328 17 92 289 62 57 164 244 24 129 1,405
20
Banco Itaú Holding Financeira S.A.
Administrative Expenses
R Million
1st Q./04
4th Q./03
Personnel Expenses Other Administrative
Expenses Reorganization
694 1,235 79
725 1,277 104
Total
2,009
2,107
Administrative Expenses under Strict Control
21
Banco Itaú Holding Financeira S.A.
Efficiency Ratio ()
59.5
55.0
54.1
48.2
Not considering the 4th Q./02 and 1st Q./03,
since we consider this criteria indicates better
the recurrent efficiency.
22
Banco Itaú Holding Financeira S.A.
Financial Instruments - Market Value
R Million
March 2004
December 2003
Unrealized Income / (Loss) (1) (2)
Result
Equity
Result
Equity
9 1,512 545 712 255 399 697 75 109 119
9 693 545 - 148 399 697 75 109 298
10 1,556 545 758 253 319 627 33 74 58
10 688 545 - 143 319 627 33 74 297
Interbank Deposits Securities and Derivatives
Exceeding Provision Adjust. of Securities
Available for Sale Adjust. of Securities
Held to Maturity Credit Operations Investments
(basically in BPI) Time and interbank dep. and
funds from accept. and Issuance of securities
abroad Securitization of payment orders
abroad Subordinated Debt and Treasury shares
Total Unrealized
2,919
2,279
2,677
2,048
(1) Tax effects not considered. (2) Includes
unrealized gains to minority interest amounting
to R 336 million in March and R 307 million in
December and R 286 million in March and R 257
million in December on Stockholders Equity.
23
Banco Itaú Holding Financeira S.A.
Pro Forma
  • The following slides show the pro forma
    information about Banco Itaú and Banco Itaú BBA
    operations, using internal data for a better
    disclosure of the managerial performance of the
    business units.
  • In 2003, it was considered as if the integration
    process between Banco Itaú BBA and the corporate
    segment of Banco Itaú occurred in the beginning
    of the year.

24
Banco Itaú Holding Financeira S.A.
Pro Forma
R Million
March 2004
December 2003
Banco Itaú
Banco Itaú-BBA
Banco Itaú
Banco Itaú-BBA
Corpo- ration
Corpo- ration
601 7,213 37.7 22,985 101,881
215 3,104 30.7 22,030 31,130
Net Income Allocated Capital Tier I ROE
() Credit Operations () Total Assets
651 6,479 46.7 22,224 95,079
48 2,924 6.7 22,468 30,233
155 2,477 27.4 - 5,680
60 2,162 11.6 - 4,620
() Endorsements and Sureties included.
Note The Consolidated doesnt represent the sum
of the parts since there are operations among
related parties, eliminated only in the
Consolidated.
25
Agenda
  • Results - Banco Itaú Holding Financeira
  • Results - Banco Itaú
  • Results - Banco Itaú BBA
  • Important Facts - Banco Itaú Holding Financeira

26

Banco Itaú S.A.
Pro Forma
R Million
Variation
1st Q./04
4th Q./03
-9.6 30.9 5.2 -4.3 30.8 -39.0 -7.7 11.3 -
Net Interest Margin Result from Loan
Losses Banking Service Fees Administrative
Expenses Income Tax and Social Contribution Other
Net Income Allocated Capital Tier I ROE ()
2,047 (352) 1,356 (1,928) (272) (250) 601 7,213 37
.7
2,264 (269) 1,289 (2,015) (208) (410) 651 6,479 46
.7
27

Banco Itaú S.A.
Consolidated Net Income
Diversification of income sources Not only
restricted to interest rates
28

Banco Itaú S.A.
Technical Provisions of Insurance, Capitalization
and Pension Plans
R Million
8,320
7,689
6,086
5,388
4,804
4,403
Growth of 96 in Technical Provisions of Pension
Plans from March 2003 to March 2004
29

Banco Itaú S.A.
Insurance, Capitalization and Pension Plans
R Million
1st Q./03
4th Q./03
1st Q./04
893 (345) (78) (336) 11
  • Insurance Premiums, Pension Plan Contributions
    and Premium Bonds Revenues
  • Changes in Technical Provisions
  • Selling Expenses
  • Insurance Claims, Pension Plan Benefits and
    Premium Bonds Redemption
  • Other Operating Income/(Expenses)

1,622 (968) (93) (412) 34
1,373 (593) (96) (529) 30
184
Operating Margin
144
186
185 (125) (71) 3
Financial Income Administrative Expenses Income
Tax and Social Contribution Other
176 (201) (56) (1)
165 (165) (64) 2
Result of Insurance, Capitalization and Pension
Plans
102
136
124
30

Banco Itaú S.A.
Mutual Funds and Managed Portfolios
R Billion
Assets under Management
Growth of 37 in volume of Mutual Funds and
Managed Portfolios in relation to March 2003
31
Agenda
  • Results - Banco Itaú Holding Financeira
  • Results - Banco Itaú
  • Results - Banco Itaú BBA
  • Important Facts - Banco Itaú Holding Financeira

32

Banco Itaú BBA
Pro Forma
R Million
1st Q./04
4th Q./03
Variation
Net Interest Margin Result from Loan Losses
() Banking Service Fees Administrative
Expenses Income Tax and Social Contribution Other
Net Income Allocated Capital Tier I ROE ()
-24.7 -187.2 -9.3 -14.1 486.7 7.5 347.9 6.2
-
256 150 49 (79) (88) (72) 215 3,104 30.7
340 (172) 54 (92) (15) (67) 48 2,924 6.7
Normalized Net Income Net Income () Provisions
constituted in the 4th Q/03 and reverted in 1st
Q/ 04, net of taxes. Normalized Net Income ROE ()
215 (46) 169 23.6
48 46 94 13,5
347.9 - 79.8
33

Banco Itaú BBA
Nonperforming Loans
R Million
Mar 31, 04
Dec 31, 03
Variation
Nonperforming Loans (NPL) Credit Operations NPL
Ratio ()
211 17,864 1.2
34 (503)
245 17,361 1.4
Itaú BBA has a high quality credit portfolio with
95.3 of volume classified as AA, A and B.
34
Agenda
  • Results - Banco Itaú Holding Financeira
  • Results - Banco Itaú
  • Results - Banco Itaú BBA
  • Important Facts - Banco Itaú Holding Financeira

35
Banco Itaú Holding Financeira S.A.
Important Facts
  • Creation of the Audit Committee (approved in the
    General Ordinary Shareholders Meeting)
  • Election of Mrs. Tereza Grossi to the Board of
    Directors as the Financial Expert of the Audit
    Committee (approved in the General Ordinary
    Shareholders Meeting)
  • Stock Grouping approved by the Administrative
    Council
  • BOVESPA 1,000 shares to 1 share
  • NYSE 2 ADRs to 1 Preferred Share

36
Banco Itaú Holding Financeira S.A.
Evolution of Net Income per 1,000 shares
R
CAGR 30.4
37
Banco Itaú Holding Financeira S.A.
Preferred Shares Appreciation Evolution of US
100 Invested from April 1994 to April 2004
US
Argentine Crisis
Attack to WTC
834
Russian Crisis
580
Real Devaluation
Asian Crisis
Mexican Crisis
Real Plan
185
100
  1. Without reinvestment of dividends
  1. With reinvestment of dividends

38
Banco Itaú Holding Financeira S.A.
Sensitivity Analysis
Variables
Scenario ()
Current
Inflation Interest Rate (SELIC) Compulsory over
Current Deposits Compulsory over Saving Dep.
(TR() 6 p.a.) Reduction of Spreads Growth
in Volumes Controlled Expenses
6.1 p.a.() 16.3 p.a. 45.0 20.0
5.0 p.a. 12.0 p.a. 25.0 20.0
() Estimated.
() Future expectations derived from this
sensitivity analysis must consider the risks and
uncertainties that involve any activities and are
away from the control of the companies of the
conglomerate (politic and economic changes,
volatility in interest rates and exchange,
technology changes, inflation, financial
disintermediation, competitive pressures over the
products and prices and changes in the applicable
regulations).
() Interest Reference Rate.
39
Banco Itaú Holding Financeira S.A.
Sensitivity Analysis
  • Branches
  • Retail Funds
  • Personnalité
  • Small and Middle Companies
  • Credit Cards
  • Vehicles Financing
  • Insurance, Pension Plans and Capitalization

40
Banco Itaú Holding Financeira S.A.
() Future expectations derived from this
sensitivity analysis must consider the risks and
uncertainties that involve any activities and are
away from the control of the companies of the
conglomerate (politic and economic changes,
volatility in interest rates and exchange,
technology changes, inflation, financial
disintermediation, competitive pressures over the
products and prices and changes in the applicable
regulations).
41
Return on Capital maintained over 20
() Future expectations derived from this
sensitivity analysis must consider the risks and
uncertainties that involve any activities and are
away from the control of the companies of the
conglomerate (politic and economic changes,
volatility in interest rates and exchange,
technology changes, inflation, financial
disintermediation, competitive pressures over the
products and prices and changes in the applicable
regulations).
42
Presentation toUBS Global Financial Services
Conference
Banco Itaú Holding Financeira S.A.
  • Alfredo Setubal
  • Investor Relations Director

Silvio de Carvalho Executive Director
May 10-12, 2004
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