0 december 2003 institutional presentation. 1 founded in 1924 controlled by moreira salles group...

1

December 2003

Institutional Presentation

2

• Founded in 1924• Controlled by Moreira

Salles Group• Brazil’s oldest private

sector bank• 3rd largest private sector

bank

• Country’s largest consumer finance operation

• Universal Banking model– Retail banking– Wholesale banking– Insurance / Pensions– Wealth Management

(R$ billion - as of December 2003)

$69.6

Assets

$27.9

Loans

$25.4

Deposits

$7.2

Shareholders Equity

BIS Ratio 18.6%

Snapshot

3

Core Businesses

Retail Wholesale Insurance WealthBank Bank and Pensions Management

December 31, 2003

• Higher and Middle Income Individuals

• Lower Income Individuals

• Small Companies

• Credit Cards

• Consumer Finance

• Mortgage Finance

• Savings Account Holders and Retirees

• Savings, Capitalization, and Annuities

• Large and Middle Market Corporations

• Trade Finance

• Corporate Finance and Brokerage

• Project Finance

• Leasing

• Treasury

• Cash management

• Mergers and Acquisitions

• Life

• Automobile

• Property & Casualty

• Health

• Homeowners

• Pensions and Retirement Plans

• Asset Management

• Private Banking

4

Special Segment(R$350 < Monthly Income > R$ 1,300)

(R$1,300 < Monthly Income < R$4,000)

Large Companies

(Annual Sales > R$150 million)

Upper Middle Market(R$40 million < Annual Sales < R$150 million)

Lower Middle Market

(R$5 million < Annual Sales < R$40 million)

(Annual Sales < R$5 million)Small Business

Private Bank

(Financial Investment > R$1 million)

UniClass Segment

(Monthly Income > R$4,000)

Banco1.net (Virtual Bank)

(Monthly Income > R$800)

Exclusive Segment

Payroll

PrivateBank

WholesaleBank

RetailBank

IndividualsCorporate

Segmentation

5

The Businesses

6

Brand Positioning

Monthly income

over R$1,000

Monthly income beetween

R$350 and R$1,000

Monthly Income under R$350

17 million people

37 million people

12 million people - Retirees- Payroll

Brands targeted for all segments

- Checking-accountholders

Source: IBGE - 2000 census - Economically active population, over 10 years old

7

In Million

0.8

3.7 4.05.2 5.6 6.0

0.7

3.03.9 3.5

4.0

2.9 3.03.0

1.1 1.11.1

Dec-94 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03

7.7

13.1 13.214.1

Note: Unibanco includes saving account holders and retirees, from 1999.

Operational Highlights

Client Base

8

1,0801,383

3,400

350

3,772

111

1,559

Dec- 99 Dec-00 Dec-01

500

5,459

5,616

CAGR = 34%

1,279

333

8,076

173

Dec-03

9,861

1,314

347

8,442

127

Dec-02

10,230

Dec-94...

711

226+

Note: Fininvest includes Fininvest stores and points-of-sale at retailers

Distribution Network Evolution

9

Wide Distribution Network

Fininvest Stores

PontoCred

LuizaCred

NetworkNetwork

TOTAL

Fininvest - Points of Sale

Branches & in-store branches

Corporate-site branches

Banco 24 Horas (ATMs)110 57 25181

654 258 1,384

8 14 53

36 25 105

North

Northeast

Mid-West

Southeast

South

63 225 1404,559

16 86

6 25 8376

65 52 297

4 217

1,02122

1,792

111

336

173

11,884

7,965

873

406

2,020

10

Direct Management Indirect Management

Consumer Companies

11

Main Indicators

R$ Million

Consumer Companies: Fininvest, Unicard, 50% LuizaCred, 50% PontoCred and 33.3% Credicard

Consumer Companies

2003 2002%

2003/2002

Billings 23,067 20,139 14.5%

Equity Income 504 407 23.8%

Credit Portfolio 4,060 3,511 15.6%

Loan Losses 765 881 -13.2%

Loan Losses / Credit Portfolio 18.8% 25.1% -630 b.p.

Volume of Transactions (in million) 338 274 23.4%

Consumer Companies (including Credicard Group)

12

R$ Million

Consumer Companies Under Management: Fininvest, Unicard, 50% PontoCred and 50% InvestCred.

Consumer Companies Managed by Unibanco

Main Indicators

Consumer Companies

Billings 10,088 9,277 8.7%



Loan Losses 647 778 -16.8%


Volume of Transactions (in million) 122 111 9.9%

2003 2002%

2003/2002

ROAE 51.7% 36.8% 1,490 b.p.

13

Main Indicators

R$ Million

Consumer Companies

2003 2002

2003/2002

Billings 5,428 4,823 12.5%


Credit Portfolio 1,065 915 16.4%

Loan Losses 234 233 0.4%


Number of Credit Cards (in thousands) 4,385 3,853 13.8%

ROAE 76.5% 64.0% 1,250 b.p.

14

R$ Million

Main Indicators

Consumer Companies

Billings 3,574 3,440 3.9%



Loan Losses 355 498 -28.7%


ROAE 49.5% 23.5%

Administrative and Personnel Expenses 387 424 -8.7%

2600 b.p.

2003 2002%

2003/2002

15

Insurance + Private Pension Plans

Technical Reserves

R$ Million

Dec-02 Jun-03 Dec-03Insurance Private Pension Plans

4Q03 3Q03 4Q02 2003 2002

2003/2002

Billings + Premiums Written 788 728 630 3,373 2,460 37.1%

Net Income 54 57 62 258 254 1.6%

Equity Income 27 28 31 129 127 1.6%

825

2,7853,532

+26.8%

3,892

+10.2%

+40%

825781

2,004

809

2,723

821

3,071

16

Market Share – Premiums Written

Insurance

Source: SUSEP and ANS

Administrative Expenses / Premiums Written

1998 2000 2002 Nov-2003

7.21%

6.65%

4.90%

2.88%

17.1%

13.0%10.6% 9.8%

2000 2001 2002 2003

17

Combined Ratio

* Includes Garantech

Source: Susep

December 2003

Market Average 104.7

84.57%

93.87%99.80%

102.43%103.06%104.75%

107.07%108.28%108.91%

112.99%

AGF BRADESCO VERA CRUZ PORTOSEGURO

REAL ITAÚ SULAMERICA

UASEG HSBC CAIXASEGUROS

18

Ranking 2003

Leadership Fire Transportation Petrochemical Aviation D&O Extended Warranty Home* Corporate Pension*

* Second Position on this segments.

19

Consolidated Results

20

R$ Million

Performance Indicators

2003 2002

2003/2002

Net Income 1,052 1,010 4.2%

Earnings/1000 shares (R$) 7.65 7.29 4.9%

Operating income 1,906 1,083 76.0%

ROAE 15.3% 16.0% -70 b.p.

BIS Ratio 18.6% 15.7% 290 b.p.

Total Loans 27,917 26,751 4.4%

Deposits+Funds 52,302 44,372 17.9%

Stockholders' Equity 7,156 6,559 9.1%

Dividends/Interest on Capital Stock- net 362 340 6.5%

21

R$ Million

Financial Margin

2003 2002%

2003/2002

11,431 14,062

(4,923) (8,366)

6,508 5,696

(1,455) (1,837)

5,053 3,859

69,208 62,021

9.4% 9.2% b.p.

-18.7%

-41.2%

14.3%

-20.8%

30.9%

11.6%

2.2

Revenue from Financial Intermediation

Expenses on Financial Intermediation

Financial Margin before Provisions for Loan Losses (A)

Provisions for Loan Losses

Financial Margin after Provisions for Loan Losses

Total Average Assets (-) Fixed Assets (B)

Net Financial Margin (A/B)

22

In R$ Million

Consolidated Results

2003 2002 %

5,053 3,859 31%

2,838 2,616 8%

(4,578) (4,233) 8%

(1,407) (1,159) 21%

1,906 1,083 76%

11 29 -62%

1,917 1,112 72%

(493) 216 -328%

(372) (318) 17%

1,052 1,010 4%

Profit from Financial Intermediation

(+) Fee Income

(-) Personnel & Adm. Expenses

(+/-) Other Operating Income/Expenses

(=) Operating Income

(+/-) Non-Operating Income (expenses), Net

(=) Income Before Taxes & Profit Sharing

(+/-) Income Tax & Social Contrib.

(-) Profit Sharing/Minority Interest

Net Income

23

R$ Million

Securities Portfolio

Dec-03 % Porfolio Dec-02 % Porfolio

Trading Securities 5,845 39% 4,957 28%

Securities Available 3,452 23% 6,411 35%

for Sale

Securities Held

to Maturity 5,773 38% 6,610 37%

Total Securities 15,070 17,978

24

R$ Million

Loan Portfolio Breakdown

4.4%

Retail Bank

Wholesale Bank

10,881 11,401 12,123

15,870 15,223 15,794

Dec-02 Sep-03 Dec-03

+4.8%

-4.1%

-0.5%

+6.3%

+3.8%

+4.9%26,751 26,62427,917

25


Corporate

14,566

1,159 2,324

18,049

13,888

1,5143,064

18,466

Large Corporate Middle Market Small Companies Total Corporate

-4.7%

+30.6%+31.8%

+2.3%

5,225

1,462 2,015

8,702

5,453

1,6722,326

9,451

Total Individuals

+4.4%

+8.6%

+15.4%+14.4%

Fininvest / PontoCred /

LuizaCredUnicard / Credicard 2002

Individuals

2003

R$ Million

Multiple Bankand Other Companies

26


R$ Million

27,917

17.0% 12.2%7.9%

10.1%9.9%

9.8%

29.0% 33.9%34.5%

34.9% 34.5% 39.0%

9.0% 9.5% 8.8%Dec-02 Jun-03 Dec-03

26,751 26,195

91.0%90.5%

91.2%

AA-C Loan Porfolio / Total Loan Portfolio

AA

D-H

A

B

C

27

Non-Accrual Portfolio / Loan Portfolio

4.2% 4.4%5.5%

6.0%

4.8%

140.5%

126.5%

102.8%96.6%

115.1%

Dec-02 Mar-03 Jun-03 Sep-03 Dec-03

Non-Accrual Portfolio / Loan Porfolio

Coverage Ratio of Non-Accrual Portfolio

28

Net Write-Off / Loan Portfolio

Required Provision vs. Additional

Loan Portfolio

Additional Provision / Total Provision

Minimum Required Provision / Total Provision

2002 2003

5.2% 3.9% 87% 86%

13% 14%

Dec-02 Dec-03

29

R$ Million

Funding

25,988 25,357

18,38426,945

Dec-02 Dec-03

FundsDeposits

44,372

52,302

-2.4%

+46.6%

+17.9%

30

Deposits and Funds Under Management

Sep-03 Dec-02

Dec03-Sep03

Dec03-Dec02

R$ Million

Demand Deposits 2,729 2,309 3,251 420 (522)

Savings Deposits 5,918 5,509 5,722 409 196

Time Deposits 16,710 17,168 17,015 (458) (305)

Total Deposits 25,357 24,986 25,988 371 (631)

Funds 26,945 24,336 18,384 2,609 8,561

Deposits + Funds 52,302 49,322 44,372 2,980 7,930

Dec-03

31

Issues – Capital Markets

DateIssue Amount

(Million)Term Maturity Coupon Return (p.y.)

US$ 1.4 billion raised in 2003

EUROBONDS

Jan-03 US$ 100 1 year Jan/04 6.875% 7.000%

Jul-03 US$ 125 18 months Jan/05 4.000% 4.000%

Jun-03 US$ 105 6 years Jul/09 6.150% 6.150%

Nov-03 US$ 226 10 years Oct/13Libor + Libor +2.860% 2.860%

SECURITIZATION

Dec-03 US$ 2001st to 5th year Dec/08 7.375%

8.200%6th to 10th year Dec/13 9.375%

TIER II

Jan-04* US$ 100 18 months Aug/05 3.000% 3.050%

Jun-03 US$ 120 6 years Jul/09Libor +4.250%

Libor +4.250%

32

Net Revenue by Business

Net Financial Result

Banking Fees

Credit Cards

Insurance/Annuities/Pension Plans

Asset Management Fees

11%

7% 5% 4% 4%

12% 11% 11%

15% 21% 21% 19%

20% 22% 27% 25%

46% 40%37%

41%

1998 2000 2002 2003

33

Fee Income / Personnel Expenses

Fee Income / Personnel and Administrative Expenses

Fee Income / Personnel and Administrative Expenses

61.8% 62.0%

158.9% 160.1%

2002 2003

34

15.5%

23.0%

IPC-A

Unibanco

8.2%

Total Expenses

IPC-A

Unibanco

9.3%

3,963 4,2334,578

2001 2002 2003

R$

mill

ion

Personnel and Administrative Expenses x IPC-A

Total Expenses - Unibanco Consolidated

35

Unibanco Pessoas Human Resources

36

Human Resources

Critical Conditions to Strategy Positioning

Business units aligned with Unibanco’s goals

Employees’ commitment

Allows the long term strategy tracking

Objectives and challenges transparent to all employees

Balanced Scorecard (BSC)Internally known as

PDG – Painel de Gestão

37

ORGANIZATION FOCUSED ON

STRATEGY

Mobilize change through leadership

Strategic Management: 5 Main Principles

Executives’ CommitmentPerformance Culture

Mission / VisionStrategic MapsObjectives, Ratios and Initiatives

Relationship: Unibanco and Businesses UnitsBusinesses Units and Support Units

Strategy CommunicationPerformance and Potential EvaluationBonus based on performance

Planning and budget linked to BSC

Data systems and analysis

Translate the strategy into operational

terms

Align the organization to the

strategy

Make strategy a continual process

Make strategy everyone’s everyday

job

Human Resources

38

Balanced Scorecard Hall of Fame

Human Resources

Saatchi & Saatchi

Unibanco is now the first and only Latin American

institution to appear in the

Balanced Scorecard Hall of

Fame, title reserved for the companies that

excel in the implementation of

the Balanced Scorecard (BSC)

model.

39

PDG as an achiever to EVA (Economic Value Added)

Managing from a value creation standpoint

Making decisions intended at adding

market value to Unibanco

Results

Clients

Internal Processes

People and Technology

AC

HIE

VE

R:

PD

G

GVU

Managing from a value creation standpoint

Making decisions intended at adding

market value to Unibanco

Results

Clients

Internal Processes

People and Technology

AC

HIE

VE

R:

PD

G

GVUGVU

Human Resources

40

Social Responsibility

41

Social Responsibility – Instituto Moreira Salles

Created in 1990, committed exclusively to promote and develop cultural programs

Conceives and executes the majority of its initiatives

Priority to medium/long-term activities and projects

Aiming to make culture even more accessible to the

public

Web Site: www.ims.com.br

Instituto Moreira Salles

42

The country’s largest private complex dedicated to

culture and arts in Brazil.

Cultural Centers dedicated to photography, literature, music and history of Brazil.

Espaços Unibanco de Cinema, a network of 35 movie theatres showing high quality / independent films.

Cultural Centers Espaços Unibancode Cinema

Poços de Caldas

São Paulo

Belo Horizonte

Rio de Janeiro

São Paulo

Rio de Janeiro

Belo Horizonte

Porto Alegre

Fortaleza

Juíz de Fora


43

Brazilian Literature Brochures

Published twice a year by the Instituto Moreira Salles Institute since March 1996.

Each publication is a monography that leans over the most important Brazilian authors

Literary features, interviews, biographical data, declarations, photo’s archive and bibliography are some of the items that can found in these brochures.

Since 2003, São Paulo State Bureau has addopted the Brazilian Literature

Brochures to supply public schools and libraries.


44

2002 – New Concept

Main focus definition, concentrating on Unibanco’s social activities.

To Promote Education

Support dedicated to Non-Governamental Organizations or foundations focused on education and Unibanco Ecologia efforts directed to Environmental Education (Environment Defense and

Preservation)

Social Responsibility – Unibanco Institute

45

Target:Mainly teenagers and young grown-ups

Formal Education

Teacher´s Skill Development

Professional Education

Employability

Social Responsibility – Unibanco Institute

46

Closing Remarks

47

Corporate Governance

Unibanco HoldingsUnibanco

Chairman: Pedro Moreira Salles

Vice-Chairmen: Gabriel Jorge Ferreira

Pedro Sampaio Malan

Board Members: Israel Vainboim

Pedro Bodin de Moraes

Armínio Fraga

Chairman: Roberto Konder Bornhausen

Vice-Chairman: Pedro Moreira Salles

Board Members: Israel Vainboim

Tomas Zinner

Gabriel Jorge Ferreira

Carlos Alberto Cruz

Guilherme Affonso Ferreira

Koji Yamada

Unibanco

Board of Directors – as of end of January 2004

Tomas Zinner

48

Unibanco: Positioned for Growth

In the year of its 80th anniversary, Unibanco enjoys an unique position in the Brazilian financial market.

The largest consumer

credit franchise in Brazil.

Cutting-edge wealth

management expertise.

Wholesale bank Benchmark for the industry.

Alliance with the world’s largest

insurance company.

Great opportunities of

cross-selling.

Improving eficciency ratios.

Massive use of technology.

ExperiencedManagement

Team

Widespread distribution

network

Comfortable capital adequacy

ratio.

The largest credit card

operation in Brazil.

A full-range product offering

49

For further information contact our Investor Relations Area at

phone: 5511-3097-1626 / 1313fax: 5511-3813-6182

email: [email protected]: www.unibanco.com

(select Investor Relations option)

This presentation contains forward-looking statements regarding Unibanco. its subsidiaries and affiliates - anticipated synergies. growth plans. projected results and future strategies. Although these forward-looking statements reflect management’s good faith beliefs. they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include. but are not limited to. our ability to realize the amount of the projected synergies and the timetable projected. as well as economic. competitive. governmental and technological factors affecting Unibanco’s operations. markets. products and prices. and other factors detailed in Unibanco’s filings with the Securities and Exchange Commission which readers are urged to read carefully in assessing the forward-looking statements contained herein. Unibanco undertakes no duty to update any of the projections contained herein.

0 december 2003 institutional presentation. 1 founded in 1924 controlled by moreira salles group...

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