Post on 13-Jan-2016
1
Banco Itaú Holding Financeira S.A.
Presentation to:
Silvio de CarvalhoExecutive Director
September 2-5, 2003
New York
2
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
3
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
4
Technology have to advance in Credit Concessions and Risk Analysis
Main Characteristics of theFinancial System
High Spread
High Fixed Expenses
High Capitalization
High Default Level
Satisfatory Provisions Level
High Services Fees
Advanced Technology for Payments, Collection and Transfers
Small Financial Desintermediation
5
Oriented to servicesOriented to services
All bills are paid in the BankAll bills are paid in the Bank
Highly automatedHighly automated
Many Points of SaleMany Points of Sale
Huge volumes of transactionsHuge volumes of transactions
Main Characteristics
Retail Banks:Retail Banks:
6
Tier One Capital / Assets (%)
Source: THE BANKER - Top 1000 – July, 2003
9.2%
14.2%
12.3%11.4% 11.7%
9.1%9.9%
9.1%10.2%
12.0% 11.9%11.1%
9.1%
4.3% 4.4% 4.5% 4.7% 4.7% 4.6% 4.6% 4.5% 4.7% 4.9% 4.7% 4.6% 4.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
90 91 92 93 94 95 96 97 98 99 00 01 02
Brazilian Financial System 1,000 Largest Banks in the World
7
Bank´s Ranking by Stockholders’ EquityDecember, 2002December, 2002
Brazilian Banks
Bradesco
Banco do Brasil
Itaú
Unibanco
ABN Amro / Real
Nossa Caixa
Banespa
Banco Safra
Sudameris
HSBC
SE(*)
10,846
9,197
9,036
6,559
4,729
4,628
4,306
2,298
1,324
1,277
Assets
142,773
204,595
111,141
75,375
36,952
128,418
28,642
25,096
16,020
25,286
Net Income
2,023
2,028
2,377
1,010
1,208
1,081
2,818
465
220
185
ROE (%)
18.6
22.0
26.3
15.4
25.5
23.4
65.5
20.2
16.6
14.5
ROA (%)
1.4
1.0
2.1
1.3
3.3
0.8
9.8
1.9
1.4
0.7Source: Statements Released.(*) Stockholders´ Equity
R$ Million
8Source: Austin Asis.
20.5
23.7
31.2
23.7
36.7
63.3
86.2
113.4
169.9
22.9
23.7
28.5
30.3
41.2
66.1
106.8
205.8
124.5
134.3
154.5
HSBC
Nossa Caixa
Banespa
Safra
ABN-AMRO
Unibanco
Itaú
CEF
Bradesco
BB 21,1
24,1
18,4
23,8
4,3
12,3
28,1
-8,5
0,0
11,6
Jun 2002Jun 2003
R$ Billion Variation (%)
Bank´s Ranking by Total AssetsJune, 2003June, 2003
9
1. Citigroup2. Bank of America Corp.3. HSBC Holdings4. JP Morgan Chase & Co.5. Crédit Agricole Group6. Mizuho Financial Group7. Royal Bank of Scotland8. Sumitomo Mitsui9. Mitsubishi Tokyo12. Deutsche Bank23. ABN AMRO Bank115. Hamburgische Landesbank118. Banco Itaú119. Woori Bank122. Banco Bradesco139. Banco do Brasil190. Unibanco
December, 2002
Ranking by Stockholder’ EquityAssets
1,097660759759609
1,081649845781795583913175405821
US$Billion
1st
12nd
7th
8th
16th
2nd
13rd
4th
6th
5th
17th
90th
209th
104th
170th
125th
279th
Rank
BIS
11.2 %12.4 %13.3 %11.9 %11.7 %9.5 %
11.7 %10.1 %11.0 %12.6 %11.5 %
n.a.19.1 %11.6 %17.9 %12.2 %
n.a.
Index
5943393836292727262418333332
SE(1)
US$ Billion
ROA
103rd
68th
48th
78th
84th
165th
85th
148th
118th
60th
94th
n.a.16th
91st
19th
74th
n.a.
%
156th
179th3
361st
725th
584th
966th
379th
930th
919th
654th
562nd
709th
25th
561st
219th
251st
301st
Rank (*)
11.2 %12.4 %13.3 %11.9 %11.7 %9.5 %
11.7 %10.1 %11.0 %12.6 %11.5 %
n.a.19.1 %11.6 %17.9 %12.2 %
n.a.
Rank (*)
Source: The Banker Top 1000 - July/03 (*) BIS ranking extracted from the largest 200 banks by SE(1).(1) Stockholder´ Equity
10
Financial Statistics - Banking System
US$ Million
124,390
160,464
108,629
17,88232,192
304,824
70,662
46,130
4,961
115,196
39,901
100,366
50
100
150
200
250
300
350
Total Assets Total Deposits Total Equity Total Loans
BrazilChileMexico
Source: Felaban – Latin America Banks Association
December, 2002
11
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
12
The 10 largest Private BanksBefore and After the Real Plan, by assetsBefore and After the Real Plan, by assets
R$ Billion
(*) Foreign participation in the 10 largest private banks.
BradescoItaúBamerindusNacionalUnibancoRealSafraBCNLloydsEconômico
TotalForeign Banks (*)
Dez. 94
19.314.412.011.2
9.67.66.56.05.45.1
97.15.6%
BradescoItaúUnibancoSantander BanespaABN Amro Safra CitibankHSBC Bank BostonVotorantim
TotalForeign Banks (*)
Mar. 03
124.6109.5
65.151.941.630.025.925.723.422.3
520.032.4%
13
Consolidation, the search for scale...
1994 2002
Source: Brazilian Central Bank
BradescoBanebBanco PontualBCRBCNCredirealBoavistaMercantilBanco CidadeBEABBV
Bradesco
ItaúBemgeBanerjBFBBanestadoBEGBBA CreditanstaltBanco Fiat
Itaú
UnibancoDibensFininvestNacionalBandeirantesBanco FordBanco 1.net
Unibanco
1994 2002
SantanderBozano MeridionalBanespa
Santander
ABN AmroBandepeRealSudameris
ABN Amro
HSBCRepublicCCF
HSBC
14
1994 2002
Source: Brazilian Central Bank
BradescoBanebBanco PontualBCRBCNCredirealBoavistaMercantilBanco CidadeBEABBV
Bradesco
ItaúBemgeBanerjBFBBanestadoBEGBBA CreditanstaltBanco Fiat
Itaú
UnibancoDibensFininvestNacionalBandeirantesBanco FordBanco 1.net
Unibanco
1994 2002
SantanderBozano MeridionalBanespa
Santander
ABN AmroBandepeRealSudameris
ABN Amro
HSBCRepublicCCF
HSBC
In Dec,1994 the 20 largest banks accounted for 74% of total asssets. In
Dec, 2002 the 20 largest banks accounted for 88% of total assets.
Consolidation, the search for scale...
15(*) Source: Febraban - Brazilian Banks Association
Banking Sector (*)
Trend - Cost EfficiencyTrend - Cost EfficiencyQuantity of Employees – Brazilian Financial SystemQuantity of Employees – Brazilian Financial System
Itaú Holding824
754700 682 672
638
559
483447
420 406 400402 401
433736
77
60
4942 43 45
47
3941
3631
0
100
200
300
400
500
600
700
800
900
Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02
0
10
20
30
40
50
60
70
80
90
CAGR 1989-2002
Sector = -5.41%
In thousands
Itaú Holding = -4.41%
16
• New consolidation period / Reduction in number of
banks;
• Increase in number of synergistic institutions;
• Higher competition – decrease of margin;
• Increase in Loans and Insurance;
• Raise in number of banking customers.
Perspectives
• Interest Rate Reduction• Spread Reduction• Enhancement of Brazilian Economy
17
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
18
• Securities and derivatives Marked to Market.
• Central of credit risk:
database for Central Bank Supervision and
informs the banks about the credit risk in consolidated
customer base
• Prevention and actions against money laundering
•Minimum Capital Base required : 11 %
•Compliance and Internal controls procedures since 09/06/2000
•Fixed Assets Reduction
Strengthen of the Financial SystemMain Iniciatives of Brazilian Central Bank
19
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
20
Banco Itaú Holding Financeira S.A.
• Largest Market Capitalization of the Brazilian Banking System: R$ 25.6 Billion (08/21/03);
• Financial Holding Company status, granted by FED;
• Member of the Dow Jones Sustainability World Index since 1999;
• Largest participation in BOVESPA’s Corporate Governance Index (IGC): 23.7% (08/18/03);
• Most Valuable Brand in Brazil: US$ 1.1 billion (Interbrand – June 2003).
21
HighlightsR$ Million
(Except were indicated)
Net Income
Stockholders’ Equity
ROE (%)
Financial Margin
Market Capitalization
Solvency Ratio (%)
Efficiency Ratio (%)
NPL (%)
2nd Q./03
776
10,772
32.1%
2,356
21,149
18.5%
46.0%
4.65%
1st Q./03
714
9,983
31.8%
2,894
20,906
19.7%
40.1%
4.16%
Variation
8.7%
7.9%
30 b.p.
-18.5%
1.2%
-120 b.p.
590 b.p.
49 b.p.
22
2.40%2.80%
1st Sem 2002 1st Sem 2003
26.90%
29.60%
1st Sem 2002 1st Sem 2003
Annualized ROEAnnualized ROE
Efficiency RatioEfficiency Ratio
Credit Operations Credit Operations NonperformingNonperforming
5.90%4.65%
1st Sem 2002 1st Sem 2003
55.20%
42.90%
1st Sem 2002 1st Sem 2003
Highlights – 1st Semester of 2003 and 2002
2.7 p.p.
0.4 p.p. -12.3 p.p.
-1.2 p.p.
Annualized ROAAnnualized ROA
23
10,772
2,229
9,036
7,578
6,6425,907
4,198
3,3372,857
880
181
2,377
2,389
1,8411,869
721592
3433923820
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
90 91 92 93 94 95 96 97 98 99 00 01 02 03(*)
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
3,250
3,500
3,750
4,000
Stockholders' Equity
Net Income
R$ Million
CAGR)(90-03) = 13.4%
1st Semester of 2003Net Income:
R$ 1,490 Million
(*) June 30, 2003
CAGR(90-02) = 23.9%
Sustained Results GrowthEvolution of Stockholders’ Equity and Net IncomeEvolution of Stockholders’ Equity and Net Income
24
Sustained Results GrowthEvolution of Stockholders’ Equity and Net IncomeEvolution of Stockholders’ Equity and Net Income
10,772
2,229
9,036
7,578
6,6425,907
4,198
3,3372,857
880
181
2,377
2,389
1,8411,869
721592
3433923820
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
90 91 92 93 94 95 96 97 98 99 00 01 02 03(*)
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
3,250
3,500
3,750
4,000
Stockholders' Equity
Net Income
R$ Million
CAGR)(90-03) = 13.4%
1st Semester of 2003Net Income:
R$ 1,490 Million
(*) June 30, 2003
CAGR(90-02) = 23.9%
Jan/90 a Jun/03Dividends:
R$ 4.6 BillionCapital Increase (1):
R$ 0.1 Billion
Adaptability to Scenarios
Real Plan
Mexican Crisis
Asian Crisis
Russian Crisis
Real Devaluation Argentine
Crisis
Collor Plan
25
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
26
R$ Million
Consolidated Balance Sheet
Liabilities
Total Liabilities
Mutual Funds
Deposits
Open Market and others
Accept./Issue - Securities
Foreign Exchange
Borrowings/On-Lending
Tech. Prov Ins/Cap/Pens.
Other Liabilities
Minority Interest
Stockholders` Equity
06/30/03with BBA
and FIAT
106,79
9
67,142
34,826
14,560
5,085
5,356
28,806
5,388
1,058
948
10,772
94,265
without BBA
and FIAT
62,391
30,929
14,015
3,623
5,153
23,071
5,388
199
865
10,772
06/30/02
86,247
56,243
28,754
16,478
3,852
3,370
20,625
3,459
673
748
8,288
Assets
Total Assets
Guarantees
Cash + Liquidity
Securities
(Additional Allowance)
Interbank Relations
Net Credit Operations
(Additional Allowance)
Foreign Exchange
Others
Permanent Assets
06/30/03with BBA and
FIAT
106,799
6,232
16,315
26,052
(545)
9,917
36,120
(848)
7,270
9,238
3,280
without BBA
and FIAT
94,265
4,778
16,385
21,874
(545)
9,741
26,501
(792)
6,737
8,706
5,658
06/30/02
86,247
4,681
15,517
20,414
(597)
7,138
27,962
(715)
4,722
8,309
3,497
27
Credit Operations
Credit Operations Credit Operations + Guarantees
R$ Million
16,890
23,674
29,61519,596
27,253
38,419 38,35434,282
44,58645,414
0
10,000
20,000
30,000
40,000
50,000
1999 2000 2001 2002 2003 (*)
28,30233,080
06/30/2003Itaú Holding without BBA and FIAT
Credit OperationsCredit Operations + Guarantees
31,50637,020
12/31/2002
(*) On June 30, 2003
CAGR = 26.5%
28
Loan Operations (*)
By Currency
Foreign Currency
Local Currency
Total
13,412
31,174
44,586
(*) Includes Guarantees
15,187
31,203
46,390
10,962
23,877
34,839
-11.7%
-0.1%
-3.9%
22.3%
30.6%
28.0%
R$ Million
By Segment
Large Companies
Very Small, Small and Medium
Companies
Individuals
Credit Card
Real Estate Indiv.
Comp.
TOTAL
06/30/03
25,830
4,077
9,672
2,809
2,096
102
44,586
03/31/03
27,492
4,262
9,751
2,618
2,154
113
46,390
06/30/02
19,172
3,400
6,924
2,758
2,411
175
34,839
Variation %Jun/03 – Mar/03
-6.0%
-4.3%
-0.8%
7.3%
-2.7%
-9.7%
-3.9%
Variation %Jun/03 – Jun/02
34.7%
19.9%
39.7%
1.9%
-13.0%
-41.4%
28.0%
R$ Million
06/30/03 03/31/03 06/30/03Variation %
Jun/03 – Mar/03Variation %
Jun/03 – Jun/02
29
5.90 5.60
4.17 4.16 4.65
12.67 12.90
8.94
1.73 1.66 1.461.99 2.35
8.46
10.66
jun-02 sep-02 dec-02 mar-03 jun-03
Credit Operations
Global
IndividualsCompanies
Nonperforming Loans Ratio (%)Nonperforming Loans Ratio (%)
Coverage Ratio (*)Coverage Ratio (*)
164% 172%198% 189% 173%
Provision for Loan LossesProvision for Loan Losses R$ Million
Total Provision (A)
Portfolio overdue over 14 days (B)
(A) – (B)
jun/01 (223)
dec/01 (118)
jun/02 (231)
dec/02 607
jun/03
2.413
2.686
3.142
2.565
2.834
2,190
2,568
2,911
3.172
3.082 248
(*) Provision for Loan Losses / Total Nonperforming Loans
30
Provision for Loan Losses
R$ Million
Minimum Provision
Additional Provision
Total Provision
1,406 1,5101,692 1,853 1,953
2,1962,515
2,332 2,285 2,234
630680
680715
715
715
747841 843 848
3,172 3,128 3,0822,911
3,262
2,6682,568
2,3722,190
2,036
Mar.01 Jun.01 Sep.01 Dec.01 Mar.02 Jun.02 Sep.02 Dec.02 Mar.03 Jun.03
31
Financial Instruments – Market Value
In Net Income
1,076
54553123
395
55
77
238
-
1,864
Market Value
26,051
30,655
6,745
15,976
1,824
4,405
353
- Securities and Derivatives
Additional Provision Adjust of Available for Sale Securities- Credit Operations
- Other Assets-Time and Interbank Deposits and Funds
from Acceptance and Issuance of Securities- Other Liabilities from trading and
intermediation amounts-Subordinated Debts
-Other
Total Unrealized
In Stockholders’Equity
545
545-
23
395
55
77
238
106
1,439
Book Value
26,051
30,632
6,350
16,032
1,901
4,643
248
Unrealized Income/(Loss) (1) (2)
R$ Million
(1) Do not consider the corresponding tax effects.(2) Includes unrealized gains to minority interest amounting to R$ 159 million.
June 30, 2003
32
Total
Trading Securities
Available for Sale Securities
Held to Maturity Securities
Derivatives – Assets
R$ Million
26,051
Market Value
9,312
14,015
900
1,825
25,415
Cost
9,298
13,484
900
1,734
Jun. 30, 2003
26,537
Market Value
8,844
14,522
1,016
2,155
26,513
Cost
8,830
14,261
1,016
2,406
Mar. 31, 2003
25,694
Market Value
8,853
13,481
1,072
2,288
26,522
Cost
8,801
13,680
1,072
2,969
Dec. 31, 2002
531
–
261
–
(199)
–
Marked to Market Adjustment –Stockholders’ Equity (A)
545 545 760
1,076 806 561
Additional Provision (B)
Unrealized Results (A) + (B)
Securities
33
Deposits and Assets under Management
R$ Million
Jun 30, 02(C)
Mar 31, 03(B)
Jun 30, 03(A)
Deposits
Demand Deposits Saving Accounts Interbank Deposits Time DepositsAssets under Management
Mutual Funds Portfolio under Management
Total
Variation %(A/C)
Variation %(A/B)
28,754
6,35616,019
6495,730
56,243
49,8196,424
84,997
37,991
7,56117,3581,042
12,03062,852
57,9874,865
100,843
21.1%
10.9%5.0%
12.1%78.3%19.4%
24.9%-23.6%
20.0%
34,826
7,05116,828
72810,21967,142
62,2334,909
101,968
-8.3%
-6.7%-3.1%
-30.2%-15.1%
6.8%
7.3%0.9%
1.1%
34
Funds Raised and Managed
R$ Million
23,22527,875 28,331 28,754
34,826
31,994
41,664
55,796 56,243
67,142
55,219
69,539
84,127 84,997
101,968
0
20,000
40,000
60,000
80,000
100,000
120,000
1999 2000 2001 2002 2003(*)
(*) On June 30, 2003.
Assets under Management
Total Resources
Total Deposits CAGR = 19.2%
35
BFB (1995) 281Banerj (1997) 25Bemge (1998) 297Banco del Buen Ayre (1998) 123Banestado (2000) 1,089BEG (2001) 364Lloyds Asset Management (2001) 160BBA(2002) 1,343BBA-Icatu (2002) 51Fiat (2002) 462Total 4,195
Goodwill on AcquisitionsR$ Million
Completely Amortized in the Consolidated
36
Conservative Accounting Practices
Total (*) R$ 2.8 billion
• Additional Provision for Loan Losses R$ 848 million
•Financial Instruments: Market x Recorded Value (Net of Additional Securities Provision) R$ 894 million
• SecuritiesR$ 531 millionMarket to Market
Additional Provision R$ 545 million
Unrealized Amounts June 30, 2003
(*) Explanatory Note 16 (R$ 1,864 million) + Additional Provision for Loan Losses
37
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
38
Statement of IncomeR$ Million
Total Assets 106,799 94,265 86,247
Financial Margin
Provision for Loan and Lease Losses
Banking Service Fees
Personnel + Other Administrative Expenses
Equity share from subsidiaries and affiliates
Extraordinary Result
Net Income
5,472
(932)
2,449
(3,554)
(62)
(548)
1,490
1st Semester
4,615
(785)
2,381
(3,350)
128
(545)
1,490
3,885
(943)
2,010
(3,366)
200
(23)
1,048
2003
With BBA and FIAT
2002Without BBA and FIAT
23.8% 9.3%
42.2% 42.2%
39
Statement of Income (*)
Financial Margin
Provision for Loan Losses
Credits Recovered
Banking Service Fees
Administrative Expenses
Recurring Income
Extraordinary Income
Net Income
Total Assets
BancoItaú
1,893
(381)
119
1,203
(1,678)
793
(17)
776
94,265
2nd Quarter of 2003Banco
Itaú-BBA
391
(91)
11
21
(83)
49
-
49
16,578
R$ Million (Except were indicated)
(*) Banco Itaú Holding includes the eliminations of the operations existing between Banco Itaú, Banco Itaú-BBA and Banco Fiat, due to the consolidation.
BancoFiat
51
(12)
6
22
(52)
13
-
13
2,973
BancoItaú
Holding (*)
2,356
(484)
136
1,246
(1,813)
793
(17)
776
106,799
40
SustainabilityIncome Diversification Income Diversification (1)(1)
Year Base: 2002
(1) Income: Financial Margin (Expenses with Provision for Loan Losses not Included) + Banking Services Fees + Income from Insurance, Cap. and Pension Plans and Equity income from unconsolidated investments.
(2) Credit Cards not included. (3) Own Working Capital included
Individuals – 73%
Tax Collection – 3%Treasury(3) – 13%
Ins./Pension Plans/Cap.– 6%Current Account Services – 6%
Funds – 6%
Credit Cards – 10%
Financial Intermediation (2)
- 53% Other – 6% Services
Credit Cards – 10%
Financial Intermediation (2)
- 50%
Companies – 27%
41
Net Foreign Exchange Position
R$ Million
- Permanent Foreign Investment
- Net balance of other assets and
liabilities indexed to foreign currency,
including derivatives
- Net Foreign Exchange Position
Jun 30, 03
7,083
(7,308)
(225)
Mar 31, 03
7,745
(5,194)
2,551
42
Result Affected by Foreign Exchange Variation
TaxEffect
Before Tax
Foreign Exchange Variation on
Investments Abroad
Results of Local Operations Affected by
Foreign Exchange Variation
Marked to Market effects of Trading
Securities
Results of Securities Selling
Result Affected by FX
-
(44)
7
(46)
(83)
(769)
686
(21)
135
32
AfterTax
(769)
642
(14)
89
(51)
2nd Quarter of 2003
TaxEffect
BeforeTax
-
(97)
(172)
22
(246)
(229)
332
505
(65)
543
AfterTax
(229)
235
333
(43)
297
1st Quarter of 2003
R$ Million
43
1st Semester 2002With BBAand FIAT
590
150
468
85
100
266
470
56
16
248
2,449
Without BBAand FIAT
580
150
468
85
100
266
470
42
2
218
2,381
Mutual Funds Management Fees
Collection
Current Account Services
Tax Collection
Interbank Fees
Credit Operations
Credit Cards
Income from Guarantees Provided
Income from Administration of Consortium
Other
Total
501
142
414
78
97
219
332
31
-
195
2,011
2003
Banking Service FeesR$ Million
18.4%21.8%
Banco Fiat contributed with
R$ 15 million
44Source: Published Financial Statements
(*) Banking Revenues: Financial Margin + Banking Services Fees + Income from Insurance Premiums, Pension Plans and Capitalization + Equity in Income of Affiliates
Quantity of Shares Adjusted by splits and subscriptions and Excluding Shares in Treasury
440
210
243
0
50
100
150
200
250
300
350
400
450
500
550
600
1995 1996 1997 1998 1999 2000 2001 2002
Itaú
Bradesco
Unibanco
Comparative: Banking Revenues/Share(*) Base: 1995 = 100Base: 1995 = 100
270
152
163
45
Efficiency Ratio(¹)
Great efforts to optimize the operational expenses and increase the efficiency
79%
43%49%
55%58%58%58%64%
58%57%
70%72%70%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
(*)
(*) 1st Semester 2003
46
Administrative Expenses
R$ Million
2nd Q./03
733
40212111496
1,080
1,813
1st Q./03
733
379114105136
1,008
1,741
Personnel Expenses
Remuneration Social Charges Social Benefits / Training ReorganizationOther Administrative Expenses
Total
Variation %
0%
6.1%6.8%8.4%
-29.6%7.2%
4.1%
40.1%46.0% Efficiency Ratio
The Administrative Expenses of Banco Fiat corresponds to R$ 52 million in
second quarter.
47
Administrative ExpensesR$ Million
1,234
2,088
1,165
1,954
1,161
1,850
1st Semester 2002
Personnel Expenses
Other Administrative Expenses
2003S/ BBAe FIAT
2003C/ BBAe FIAT
3,322 3,119 3,011Sub-Total
232 231 355Restructuring
3,554 3,350 3,366Total
48
R$ Million
1st Semester
Personnel Expenses
Administrative Expenses
Sub-Total
Restructuring
Total (Without BBA and FIAT)
Salaries.......7%
Dollar.........45%IPCA*.........17%
Indices
Salaries.......7%
Total (With BBA and FIAT)
1,165
1,954
2003
3,119
231
3,350
3,554
204• BBA + FIAT
(58)
(344)
Variation
(402)
(149)
(551)
(347)
-
1,223
2,298
2002 Adjusted
3,521
380
3,901
3,901
-
Adjusted Administrative Expenses
(*) IPCA = Consumer Prices Index
49
Payments/Provisioning of Interest on Own Capital
1st Half 2003
1st Half 2002
Paid / Prepaid
Provisioned
TOTAL
61
346
407
43
110
153
R$ Million
Evolution (%)
41.9%
214.5%
166.0%
(*) Amounts net of taxes.
50
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
51
187 267 345 476 559 8001,232 1,071
2,038535
-548-23-82
225
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1995 1996 1997 1998 1999 2000 2001 2002 2003*
Extraordinary Result
Recurring Result 1st Sem.
Evolution of Net Income - Semesters
(*) On June 30, 2003
R$ Million
CAGR Recurring = 37.5%
1.490
52
347 610939 1,128
1,5181,918
2,353
3,080
-218 -248
351
-703-77
36
-18
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1995 1996 1997 1998 1999 2000 2001 2002 2003*
Extraordinary Result
Recurring Result
R$ Million
(*) On June 30, 2003
CAGR Recurring = 36.6%
2.377
Evolution of Net Income - Annual
53
1.57 2.23 2.89 4.04 4.74 6.9511.04 9.63
17.824.54
-4.79-0.7 -0.21
2.02
-10
-5
0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003*
Extraordinary EPS
Recurring EPS
Evolution of EPS - Semesters
(*) On June 30, 2003
13.03
CAGR Recurring = 38.3%
Decr. Number of Shares (%) = -0.6%
R$
54
2.91 5.097.86 9.57
12.8716.66
21.08
27.69
-1.83
2.98
-2.1-6.32
-0.67
0.32
-0.15
-10
-5
0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003*
Extraordinary EPS
Recurring EPS
(*) On June 30, 2003
21.37
CAGR Recurring = 38.0%
Decr. Number of Shares (%) = -1.0%
R$
Evolution of EPS - Annual
55
906
268
439
0
100
200
300
400
500
600
700
800
900
1000
1995 1996 1997 1998 1999 2000 2001 2002 2003
Itaú (*)
Bradesco
Unibanco
Source: Published Financial Statements
Just for comparison purposes the half-yearly net incomes were multiplied by 2 (EPS Base: 1995 = 100)
Market Comparison – EPSBase: 1995 = 100Base: 1995 = 100
556
258
324
743
293
449
56
906
268
439
0
100
200
300
400
500
600
700
800
900
1000
1995 1996 1997 1998 1999 2000 2001 2002 2003
Itaú (*)
Bradesco
Unibanco
Source: Published Financial Statements
Just for comparison purposes the half-yearly net incomes were multiplied by 2 (EPS Base: 1995 = 100)
Market Comparison – EPSBase: 1995 = 100Base: 1995 = 100
556
258
324
743
293
449Results consistent with
the Shareholder
Value
57
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
58
2,218 2,233 2,971 3,437 3,247
5,8387,184
18,550
21,81120,056
25,575
19,122
7,056
0
5,000
10,000
15,000
20,000
25,000
30,000
91 92 93 94 95 96 97 98 99 00 01 02 03(*)
R$ Million
(*) – August 21, 2003
Market CapitalizationBanco Itaú Holding Financeira S.A.Banco Itaú Holding Financeira S.A.
CAGR = 23.7%
59
10,896
18,915
23,341
7,056
18,141
20,05618,550
21,811
19,122
25,575
22,148
9,269
17,119 16,969
3,185
6,0367,185
5,6354,861
6,382
15,120
18,06817,49020,345
15,451
6,901
15,847
19,808
6,901 6,963
2,439
7,5377,460
0
5,000
10,000
15,000
20,000
25,000
dez/98
mar/99
jun/99se
t/99
dez/99
mar/00
jun/00se
t/00
dez/00
mar/01
jun/01se
t/01
dez/01
mar/02
jun/02se
t/02
dez/02
mar/03
jun/03
ago/03
R$ Million
Source: Economática. Period : Dec/98 until Aug. 21 2003
Itaú
Bradesco
Unibanco
The largest banks in Brazil
BradescoItaú HoldingUnibanco
Stockholders’ Equity Jun/2003
12,62910,772
7,601
Consistently the largest Market Capitalization in Brazilian banking sector
60
32,520,887
30,415,020
16,617,34916,617,349
21,071,420
21,986,065
11,449,467
8,428,955
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2001 2002 2003(**)
Total Bovespa NYSE
R$
Daily Average Traded Volume - LiquidityBovespa + NYSE(*)Bovespa + NYSE(*)
(*) – Common, Preferred Shares and ADRs
(**) – Daily Average until August 21, 2003
CAGR = 47.9%
CAGR = 14.9%
61
32,520,887
30,415,020
16,617,34916,617,349
21,071,420
21,986,065
11,449,467
8,428,955
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2001 2002 2003(**)
Total Bovespa NYSE
R$CAGR = 47.9%
CAGR = 14.9%
Equivalent to US$ 11 million
Aug/03 :Over 10 million
ADRs Issued
Daily Average Traded Volume - LiquidityBovespa + NYSE(*)Bovespa + NYSE(*)
(*) – Common, Preferred Shares and ADRs
(**) – Daily Average until August 21, 2003
62
0
200
400
600
800
1,000
1,200
93 94 95 96 97 98 99 00 01 02 03
Itaú (1)Itaú (2)Bovespa
US$
100
748
321
1,094Itaú(1) Itaú(2) Ibov.
10 years 25.19% 20.80% 11.57%
5 years 20.76% 16.14% -2.32%
2003 74.20% 71.17% 57.35%
Annual Average Appreciation in US$
Real Plan
Russian Crisis
Real Devaluation
Mexican Crisis
Asian Crisis
Argentine Crisis
Attack to WTC
(1) With reinvestment of dividends(2) Without reinvestment of dividends
Preferred Shares AppreciationEvolution of US$ 100 Invested from Dec. 1992 to August 21, 2003Evolution of US$ 100 Invested from Dec. 1992 to August 21, 2003
63(*) APIMEC – Brazilian Association of Analysts and Investment Professionals of the Capital Markets.
Focus on Corporate Governance
Apr-00 – Creation of the IR website
May-01 – APIMEC* Meeting – 10 hours
Jun-01 – Adherence to Bovespa´s Level 1
Jun-02 – Trading and Disclosure Committees
2002 – 11 APIMEC Meetings (Pioneership in Brazil)
Transparency
Apr-00 – Independent Fiscal Council
Apr-01 – Independent Members in the Board
of Directors
Apr-02 - Tag Along and Reinforcement of the
Independence of the Board
Jul-02 – Trading and Disclosure Committees
Respect to the Minority Shareholders
Member of the Dow Jones Sustainability Index since 1999
Feb. 2002 – Listing of ADR Level II at NYSE + Financial Holding Company status by FED
Effective creation of Value to the Shareholders
64
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
65
OpportunitiesBrazilian Banking SystemBrazilian Banking System
Increase and diversification of the market
Customers
66
2002
2.8
4.2
6.2
9.8
31.4
36.2
25.6
16.6
Brazil
Chile
Mexico
South Korea
Spain
UK
Japan
USA
Room for
Growth
Trend - CustomersTrend - CustomersGDP per capita (US$’000)GDP per capita (US$’000)
Source: International Financial Statistics / IMF –Preliminary Data
67
Million
Itaú´s Positioning - CustomersItaú´s Positioning - CustomersConsistent growth in number of customersConsistent growth in number of customers
Through:•Acquisitions•Organic Growth
3.6
5.5
6.5
7.4
8.8 9.1
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
BFB
Jun-03
68
159.1
209.3190.7
336.5
395.6
452.7
257.7
0
100
200
300
400
500
1996 1997 1998 1999 2000 2001 2002
CAGR = 19.0%
R$ Million
(*) Includes: Electronic Bank, Computers and Peripherals and Telecommunications.
Investments in Infrastructure (*)...
1st Sem/2003 = R$ 151.8 million
Total in the period:R$ 2.2 billion
Accounting Value R$ 469 million
(06/30/03)
69
1 154 340923
13,777
8,876
27
6,558
11,714
2,976
18,533
795866 913
1,071
1,8532,017
1,826
2,597
1,905
1,479
582
3,175
1,304
2,995
400
1,100
1,800
2,500
3,200
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03(*)
0
5,000
10,000
15,000
20,000
ATMs
Quantity
Branches + CSBs(**)
(*) June 30, 2003 (**) – Customer Site Branch
CAGRBranches + CSBs = 6.4%
Distribution Network Evolution
Obs.: 308 Points of Sale in 1972
70
5,051 5,2475,524 5,587
6,060
8,411
13,892
10,764
13,462
4,2894,800
4,000
6,000
8,000
10,000
12,000
14,000
85 87 89 91 93 95 97 99 01 03(*)
Checking Accounts(**)
Checking AccountsThousand
(*) June 30, 2003
CAGR = 6.0%
(**) – 1990, 1991 and 1992 : excluded the checking accounts in NCz$ and DER / VOBC
71
41,630
47,524
42,262
31,368
87,436
54,300
41,911
32,750
25,000
66,922
37,119
49,433
60,865
77,692
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03(*)
Employees
Employees
(*) June 30, 2003
CAGR = 1.9%
72
154
344
111
79514142
222
1,998
1,427
1,121
813
477284141
2,598
0
40
80
120
160
200
240
280
320
360
1995 1996 1997 1998 1999 2000 2001 2002
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
Transactions (milllion)
Customers (million)
1st Semester 2003Transactions: 204 Million
Customers: 2.9 Million
… Creating Efficiency to our Customers Internet BankingInternet Banking
73
Increase and diversification of the market
Customers
Credit Operations
OpportunitiesBrazilian Banking SystemBrazilian Banking System
74
2001
Source: International Financial Statistics / IMF
19
24
67
126
140
153
30
114
109
Mexico
Argentina
Brazil
Chile
Spain
Japan
Germany
UK
USA
Trend – Credit OperationsTrend – Credit OperationsLoans / GDP (%)Loans / GDP (%)
Room for
Growth
75
Increase and diversification of the market
Customers
Credit Operations
Vehicles Financing
OpportunitiesBrazilian Banking SystemBrazilian Banking System
76
4.5 5.0 5.6 5.6 5.6
3.5 3.5
7.0
1Q/00 1Q/01 1Q/02 Dec 2002(1) Mar 2003(2)
Itaú Fináustria Fiat
Source : Banco Itaú estimates based on Bacen , Abel , Itaú, Fiat and Fináustria data
In %
9.0
16.0
(1) Acquisition of Fináustria CFI(2) Acquisição of Banco Fiat
Itaú’s Market Share Consumer Credit and Vehicle Leasing MarketConsumer Credit and Vehicle Leasing Market
77Source : Banco Itaú, Fiat and Fináustria
Distribution of Financing by Vehicle Age
88%
7% 5%
53%
20%27%
37%
21%
42%
0km to 3 years 4 to 6 years > 6 years
Fiat Itaú Fináustria
Also complementary in different kinds of
market
78Source : Banco Itaú, Fiat e Fináustria
Distribution of Financing by Rate
95%
5%
56%
44%
26%
74%
2.0 to 3.0 % > 3.0 %
Fiat Itaú Fináustria
79Source : Banco Itaú, Fiat and Fináustria
Customer Vehicle Financing Portfolio
ITAÚ
Fináustria
Banco Fiat
TOTAL
325 thousand
225 thousand
350 thousand
895 thousand
80
Proposals Examined (*)
ITAÚ
Fináustria
Banco Fiat
TOTAL
16 thousand
17 thousand
13 thousand
46 thousand
(*) Monthly Average – 2nd Half 2002Source : Banco Itaú, Fiat andFináustria
81
(*) Monthly Average – 2nd Half 2002Source : Banco Itaú, Fiat and Fináustria
Number of Monthly Financing Operations (*)
ITAÚ
Fináustria
Banco Fiat
TOTAL
7,500
5,700
7,400
20,600
82Source : Bacen
Ranking of Vehicle Finance Companies May 2003May 2003
ManagerRanking byParticipants
Number ofParticipants
Market Share
Volkswagen 1st 109,357 12%
Fiat + Itaú 2nd 95,803 11%
Fiat 2nd 89,257 10%
GM 3rd 67,832 8%
Disal 4th 47,441 5%
Unibanco Rodobens 5th 31,646 4%
CNF 6th 23,724 3%
Novaterra 7th 21,589 2%
Servopa 8th 21,078 2%
Rodobens Administradora e Promoções Ltda 9th 16,381 2%
União 10th 13,888 2%
83(*)variation in funding rate (p.m.) half year average for Fiat/FináustriaSource: Banco Itaú
107
105
108 108109
104
101
105104
101
1 Sem 01 2 Sem 01 1 Sem 02 2 Sem 02 1 Sem 03
Fiat Fináustria
Itaú FundingItaú = base hundreds per periodItaú = base hundreds per period
84
R$ 100 million
8.5% 29% 37%... ...
18% ...
......
......
29% ...
17% (2%)... ...
51%6.7% 1.3% 2%
Commercial Credit Operational Systems Cost
reductionFináustria
Commercial
Credit Operational
Systems
Cost reduction
FIAT
Costreduction
TOTAL
Fináustria Fiat
Source : Banco Itaú
Estimated Cost Reduction for 2004After I.T. and Social ContributionAfter I.T. and Social Contribution
85
135 ..... 306
71 ....
100 ....
Itaú Fináustria Fiat Total
Source : Banco Itaú
Estimated Growth in Annual Total RevenuesItaú = base hundredsItaú = base hundreds
(*) Total Revenues: Financial Margin + Banking Service Fees + Insurance Revenues, Pension Plan and Capitalization + Equity Income from Afilliates
86
OpportunitiesBrazilian Banking SystemBrazilian Banking System
Increase and diversification of the market
Customers
Credit Operations
Vehicles Financing
Large Corporations
5
2
553
22
6
-
25
1
3
300
-
4
12
50
3
2
620
34*
11
-
43
Vice-Presidents
Management levelsto Client
Nº of Employees
Executive Share-holders
Regional Directors
Commercial Superintendents
Officers
(73% of the total)
CorporateBank
Itaú BBA – Structuring the Bank
(*) 12 executiv(*) 12 executives invited to become shareholderses invited to become shareholders
Name / Reputation
Solid Capital Base
Ability to Attract and Retain the Best Talents
Being independent enables differentiated HR policies to
generate motivation
Streamlined and informal structure makes for versatility and
responsiveness
Broad range of products
Focus on creating value for shareholders
Summary of Structure and Market Position
Challenge overcome
Minimal loss of staff
Readily accepted by clients
Principal Challenge: Integration
Lacks the inertia of retail results
Builds its results anew each quarter
Ability to adapt to circumstances
Competitive in all market segments
Wholesale Bank
Challenges and Opportunities
Improvement in credit quality Lower losses and provisions
Higher volumes
Increase in Capital Markets operations
Compensating Factors
Falling spreads
Lower volatility reduces Treasury gains
Falling interest rates
Adverse Factors
Challenges and Opportunities
Maintain the high return on equity
Responsibilities
To fully exploit the potential for cross-selling
To multiply volumes and processing capacity
To apply creativity to undifferentiated products
Capital Market and M&A Well positioned to grow with the market
Well developed structure for origination and distribution of
securities
Opportunities
Challenges and Opportunities
Pro-Forma Balance Sheet
The operations of Itaucorp were incorporated on a preliminary basis in order to demonstrate approximately what Banco Itaú-BBA will be after all the migrations between segments have terminated. There are still adjustments to be made.Forecasts based on this exercise should therefore bear in mind the already mentioned risks and uncertainties as well as those that are beyond the control of the companies comprising the Itaú conglomerate (political and economic change, volatility in interest and exchange rates, technological change, inflation, financial disintermediation, competitive pressures on products and prices and changes in tax law).
R$ Million
LIABILITIESBanco Itaú-BBA
Pro FormaDeposits
Open market liabilities
Loan liabilities
Pass-through loan liabilities
Other liabilities
Deferred income
Capital
Balance Sheet at June 30 2003 ASSETS Banco Itaú-BBA
Pro Forma
Cash, Interbank placements and securities
Loans
Bad Debt Provision
Other Assets
Fixed Assets
TOTAL ASSETS
9,290
17,637
(574)
1,428
95
27,876
15,565
2,368
2,848
1,204
2,248
13
3,630 TOTAL LIABILITIES 27,876
The operations of Itaucorp were incorporated on a preliminary basis in order to demonstrate approximately what Banco Itaú-BB A will be after all the migrations between segments have terminated. There are still adjustments to be made.Forecasts based on this exercise should therefore bear in mind the already mentioned risks and uncertainties as well as those that are beyond the control of the companies comprising the Itaú conglomerate (political and economic change, volatility in interest and exchange rates, technological change, inflation, financial disintermediation, competitive pressure on products and prices and changes in tax law).
R$ Million
INCOME STATEMENT 1st Half of 2003Banco Itaú-BBA
Pro Forma
1,252
(174)
1,078
120
(276)
922
(415)
507
3,630
29.9%
Financial margin
Bad debt provision
Gross income from Financial Intermediation
Fee income
Administrative Expenses
Income before tax and participations
Income Tax and Social Contribution
Net Income
Net Worth
ROE (%)
Pro-Forma Income Statement
94
Increase and diversification of the market
Credit Cards
Customers
Credit Operations
Vehicles Financing
Large Corporations
OpportunitiesBrazilian Banking SystemBrazilian Banking System
95Source: ABECS – Brazilian Associacion of Credit Cards and Services Industry
41.5
17.2
35.3
7.9
72.2
5.2
62.9
25.5
0
10
20
30
40
50
60
70
80
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Trend – Credit CardsTrend – Credit CardsEvolution in Credit Cards - BrazilEvolution in Credit Cards - Brazil
1st Semester 2003Vol. of Transactions: R$ 40.3 Billion
44.5 Million Credit Cards
Number of Cards (million) CAGR: 16.2%
CAGR : from 1996 to 2003*
Volume of Transactions (R$ Billion) CAGR: 19.5%
(*) June 2003
96
Trend – Credit CardsTrend – Credit CardsEvolution in Credit Cards - ItaúEvolution in Credit Cards - Itaú
CAGR = 25.9%
1,000 1,104
1,829 1,799
2,279
3,321
4,590
5,579 5,616
0
1,000
2,000
3,000
4,000
5,000
6,000
1995 1996 1997 1998 1999 2000 2001 2002 2003*
In Million
(*) On June 30, 2003.
97
Credit CardsMarket Share by Sales (%)Market Share by Sales (%)
Itaucard
Credicard
Bradesco
Banco do Brasil
Unibanco
1997
9.7%
n.d.
10.2%
8.8%
9.7%
1998
9.4%
n.d.
9.5%
10.1%
9.2%
1999
10.3%
27.0%
11.1%
10.5%
8.3%
2000
11.4%
24.8%
11.5%
11.5%
8.1%
2001
12.2%
23.4%
11.5%
12.1%
8.7%
2002
12.7%
20.8%
11.7%
13.1%
8.6%
2003*
12.8%
18.3%
11.9%
13.8%
7.9%
Itaú’s Share in Credicard: 33%
(*) On June 30, 2003.
98
Increase and diversification of the market
Credit Cards
Insurance and Others
Customers
Credit Operations
Vehicles Financing
Large Corporations
OpportunitiesBrazilian Banking SystemBrazilian Banking System
99
Trend – Diversification - InsuranceTrend – Diversification - InsuranceInsurance Premiums / GDP (%)Insurance Premiums / GDP (%)
Source: Swiss Reinsurance Company Economic Research and Consulting
2001
14.2
11.1
9.0
6.3
6.3
4.2
2.6
2.1
1.8
UK
Japan
USA
Spain
Hong Kong
Chile
Argentina
Brazil
Mexico World Average = 7.83%
Room for
Growth
Trend – Insurance and OthersTrend – Insurance and OthersEvolution of Technical Provisions – BrazilEvolution of Technical Provisions – Brazil
17,624
7,863
26,754
31,211
14,443
4,436
7,203
683
1,231
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Dec/9
4
Dec/9
5
Dec/9
6
Dec/9
7
Dec/9
8
Dec/9
9
Dec/0
0
Dec/0
1
Dec/0
2
Jun-
03
Pension Plans
Insurance
Capitalization
R$ Million
Source: FENASEG – National Insirance Association
101
R$ Million
98.3%Combined Ratio (without health insurance segment) 97.1%
55.3%Claims Ratio (without health insurance segment) 56.9%
1,431
(494)
(110)
(539)
25
Insurance Premiums, Pension Plans Contributions and Premium Bonds
Revenues
Changes in Technical Provisions
Selling Expenses
Insurance Claims, Pension Plans Benefits and Premium Bonds
Redemption
Other Operating Results
2,133
(972)
(129)
(702)
36
366Operating Margin 313
1st Semester 2002
16.9%
2003
Itaú´s Positioning – Insurance and OthersItaú´s Positioning – Insurance and OthersEvolution of the ResultsEvolution of the Results
102
R$ Million
157
13
2 246
(234) (28) 27
170
7 177
(60) (3)
Financial Margin
Other Revenues / Operating Expenses
Banking Service FeesPartial Results of Insurance, Capitalization and Pension PlansAdministrative ExpensesTax ExpensesOther Operating Income / Operating ExpensesOperating Income
Non-Operating IncomeIncome before Income Tax
Income Tax / Social ContributionProfit Sharing
309
56 20
322 (203)
(45) (38) 365
7 372
(127) (3)
242Net Income 114
112%
1st Semester 20022003
Itaú´s Positioning – Insurance and OthersItaú´s Positioning – Insurance and OthersEvolution of the ResultsEvolution of the Results
103
Earnings per Share
Stock Market
Opportunities
Agenda
Sensitivity Analysis - Retail
Results
Balance Sheet
Statement of Income
Brazilian Banking System
Dynamics
Consolidation
Regulations
104
Variables
Inflation
Interest Rate (SELIC)
Compulsory over Current Deposits
Compulsory over Saving Dep. (TR** + 6% p.a.)
Reduction of Spreads
Growth in Volumes
Controlled Expenses
Scenario (*)
9.2% p.a.
26.2% p.a.
45.0%
20.0%
Current
5.0% p.a.
12.0% p.a.
25.0%
20.0%
(*) 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).
Sensitivity Analysis – Retail (*)
(**) Interest Reference Rate
105
• Retail Funds
• Branches
• Personnalité
• Small and Middle Companies
• Credit Cards
• Vehicles Financing
• Insurance, Pension Plans and
Capitalization
Sensitivity Analysis – Retail
106
R$ Million
Resources 100 100 100 130 91 70
Current Situation Scenario (*)
Average Balance
Financial Margin
Spread Average Balance
Financial Margin
Spread
Loans - Individuals 100 100 100 154 96 58
Loans - Businesses 100 100 100 149 98 62
Real Estate Credit 100 100 100 152 130 85
Banking Service Fees 100 123
Total Revenues 100 101
Insurance Products 100 166
Provisions 100 94
Expenses 100 120
Net Income before tax 100 87(*) 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).
Sensitivity Analysis – Retail (*)
107
R$ Million
Resources 100 100 100 130 91 70
Current Situation Scenario (*)
Average Balance
Financial Margin
Spread Average Balance
Financial Margin
Spread
Loans - Individuals 100 100 100 154 96 58
Loans - Businesses 100 100 100 149 98 62
Real Estate Credit 100 100 100 152 130 85
Banking Service Fees 100 123
Total Revenues 100 101
Insurance Products 100 166
Provisions 100 94
Expenses 100 120
Net Income before tax 100 87
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).
Sensitivity Analysis – Retail (*)
108
Banco Itaú Holding Financeira S.A.
Presentation to:
Silvio de CarvalhoExecutive Director
September 2-5, 2003
New York