banco itaú holding financeira s.a. -------------- banco itaú holding financeira s.a. january...

Banco Itaú Holding Financeira S.A.Banco Itaú Holding Financeira S.A.

--------------

Banco Itaú Holding Financeira S.A.

January 19-21, 2005Cancún, Mexico

Presentation to:9th Annual Latin American Conference

Silvio de CarvalhoExecutive Director

2


Scenario in Brazil

Credit Perspectives

Regulatory Environment

Brazilian Banking System

Itaú Holding

Highlights

3rd Quarter 2004 Results

New Initiatives in Consumer Credit

Competition

Sensitivity Analysis

3


Brazilian Macroeconomic Scenario

High volatility Lower volatility

High interest rates Declining interest rates

Brazil risk Stable risk

Low growthModerate and sustained

growth

Economic Instability Political Stability

A Change of Perspective

Pre- 2002 Post- 2003

4


Spread Decomposition

Decomposição do spread bancário -98 bancos (públicos e privados)

imp. diretos10,3%

resíduo do banco23,5%

custo administrativo28,3%

FGC0,2%

inadimplência27,3%

compulsório (dav)8,0%

compulsório (dp)0,3%

imp. indiretos2,0%

Source: Costa and Nakane, 2004

Administrative Expenses28.3%

Bank´s profits23.5%

Compulsory (Time Dep.)

0.3%

Default27.3%

Direct Taxes10.3%

Indirect Taxes2.0%

Compulsory (Demand Dep.)8.0%

FGC*0.2%

Banking Spread Decomposition

Sample: 98 public and private banks

(*) FGC = Fundo Garantidor de Crédito (Credit Guaranteeing Fund)

5


Reserve Requirements X Spread

Source: Brazilian Central Bank

28,4% 27,8%

12,9%

12,8%

57,9%

45,6%45,0%

45,0%

15,0%

0,0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

jun/00 dez/00 jun/01 dez/01 jun/02 dez/02 jun/03 dez/03 jun/04 dez/04

Total Spread Spread - CompaniesSpread - Individuals Reserve Req. o/ Demand DepositsReserve Req. o/ Time Deposits

6


Reserve Requirements over Demand Deposits

Interest-bearing Non Interest BearingSource: Central Banks

45%

10%6%

1,3%

8%

2%

9%

0%

10%

20%

30%

40%

50%

60%

Brazil Chile E.U. Japan Peru USA

53%

7


Credit Operations X Spread

Source: Brazilian Central Bank

12,9%12,8%

57,9%

45,6%

160,5

85,4

112,5

39,70%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

jun/00 dez/00 jun/01 dez/01 jun/02 dez/02 jun/03 dez/03 jun/04 dez/04

30

50

70

90

110

130

150

170

Spread - Companies Spread - Individuals

Credit Operations - Companies Credit Operations - Individuals

R$ Billion%

8


Penetration of Consumer LoansAs a % of the GDP

Source: Central Bank and CSFB estimates

0,9% 1,1%1,6%

2,1%

4,6%

6,0%

6,6%5,6%

7,4%6,9%

5,8%

5,2%

0%

2%

4%

6%

8%

2001 2002 2003 2004

Mexico Brazil Chile

9


Banking sector viewCommon ground among Itaú Holding, Bradesco and Unibanco (*)

Macroeconomic outlook is positive, although micro economic

and reforms agenda still need to be achieved;

Focus on credit, particularly in consumer finance;

Spreads will be reduced, but tax burden is still an obstacle;

Consolidation will occur in niches, organic growth and strong

capital base are key to the future of the banks;

Foreign banks: likely to increase their participation in the

Brazilian banking sector.

(*) Source: Interviews with CEOs published on Valor Econômico newspaper in

December 2004 and January 2005

10


Banking sector viewCommon ground among Itaú Holding, Bradesco and Unibanco (*)

Macroeconomic outlook is positive, although micro economic

and reforms agenda still need to be achieved;

Focus on credit, particularly in consumer finance;

Spreads will be reduced, but tax burden is still an obstacle;

Consolidation will occur in niches, organic growth and strong

capital base are key to the future of the banks;

Foreign banks: likely to increase their participation in the

Brazilian banking sector.

(*) Source: Interviews with CEOs published on Valor Econômico newspaper in

December 2004 and January 2005

Antonio Palocci (*)

• Privatization will continue – next state bank

in line is BEC (Banco do Estado do Ceará);

• Insurance and Reinsurance sectors likely to

be privatized.

(*) Interview published on Valor Econômico (Jan. 3, 2005)

+ Autonomy of the Central Bank


Laws approved in 2004

PPPs (Public-private partnerships)

Bankruptcy Law (still pending presidential sanction)

Judicial system reform*

Incentive to civil construction

New electric sector model

Destination of CIDE (tax over fuel)**

*Approved external control and other measures to reduce bureaucratization.Pending issues like nepotism yet to be discussed by the Congress.

** Was part of the tax reform.

12


Brazilian Banking System

Macro Characteristics Micro Scenario

Huge fixed costs Cost reduction / efficiency Strongly capitalized Room for growth in credit Satisfactory level of provisioning Conservative approach

Advanced risk management Advanced banking supervision; preparation for Basel II

Importance of banking service fees Specific for each segment

Profitable Target: to keep profitability in lower margins scenario

Orientedo to services Intensive use of technology, focused

on self-service and Internet All bills are paid in the banks

Huge transaction volumes

High spreads Falling due to decline in interest rates

Dimension Differentiated needs

High reserve requirements High impact over spreads

13


1. Citigroup2. Crédit Agricole Group 3. HSBC Holdings4. Bank of America Corp.5. JP Morgan Chase & Co.6. Mizuho Financial Group7. Mitsubishi Tokyo8. Royal Bank of Scotland9. Sumitomo Mitsui10. BNP Paribas20. ABN AMRO Bank109. Bradesco113. Bank of Taiwan114. Banco Itaú116. Standard Bank Group117. Banco do Brasil171. Unibanco

December 2003

Assets

1,2641,1051,034

736771

1,285975806950989668617041818024

US$Billion

2nd

4th

5th

15th

13th

1st

8th

10th

9th

7th

18th

139th

125th

197th

115th

117th

268th

Rank

BIS

12.0 %10.5 %12.0 %11.9 %11.8 %11.4 %13.0 %11.8 %11.4 %12.9 %11.7 %19.9 %14.6 %

19.8 %14.8 %13.7 %18.6 %

Index

6755554443383735343223544442

SE(1)

US$ Billion

ROA

%

167th

633rd

401st

154th

382th

638th

536th

361st

755th

569th

510th

309th

816th

17th

283rd

169th

84th

Rank (*)

Source: The Banker Top 1000 - July/04 (1) Stockholder´ Equity

2.1 %0.7 %1.2 %2.2 %1.3 %0.7 %0.9 %1.4 %0.4 %0.8 %0.9 %1.5 %0.3 %4.7 %1.6 %2.1 %2.8 %

14


Stockholders’ Equity, Net Income and Market Capitalization

11,879

9.0367.578

6.6425.9074.6514.1983.842

3.3373.150

30,453

18.11619.582

17.834

6.7866.2754.978

3.270 3.160

21.297

393 343

592721

2.389 2.377

3.152

880

1.8411.869

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-030

400

800

1.200

1.600

2.000

2.400

2.800

3.200

Stockholders' Equity

Market Capitalization

Net Income


R$ Million

September 2004Net Income: R$ 2,745 million

Stockholders´ Equity: R$ 13,471 millionMarket Capitalization: R$ 34,959 million

15


Financial Ratios (%)

2,6 2,9 2,1 2,7 2,7

31,5

26,3 26,528,1

14,416,9

19,8 19,4

27,7

18,4

0

5

10

15

20

25

30

35

dez/00 dez/01 dez/02 dez/03 set/04(*)

Net Income / Assets (ROA) Net Income / Stockholders' Equity (ROE) BIS Ratio


(*) Annualized Ratios

16


32.068

48.995

69.555

118.738

138.520

81.807

18.25924.445

51.91146.357

111.141

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

110.000

120.000

130.000

140.000

dez/94 dez/95 dez/96 dez/97 dez/98 dez/99 dez/00 dez/01 dez/02 dez/03 set/04

R$ Million

Asset Evolution


CAGR: 23.1%

17


Points of Sales

3.1923.1892.642

2.540

1.8411.902

3.074

20.703

7.4507.888

10.28311.218

14.579

18.071

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

22.000

BFB

ATMs

Branches+CSBs*


sep/

04

(*) CSBs = Customer-site Branches

18


3.3

9.3

3.6

5.5

6.5

7.4

8.8 9.1

dez/94

mar/95jun

/95se

t/95

dez/95

mar/96jun

/96se

t/96

dez/96

mar/97jun

/97se

t/97

dez/97

mar/98jun

/98se

t/98

dez/98

mar/99jun

/99se

t/99

dez/99

mar/00jun

/00se

t/00

dez/00

mar/01jun

/01se

t/01

dez/01

mar/02jun

/02se

t/02

dez/02

mar/03jun

/03se

t/03

dez/03

mar/04jun

/04se

t/04

BFB

Growth in number of CustomersWith acquisitions


In Million

19


441

518

79111

154

222

344

813

1.121

1.427

1.998

2.598

3.157

3.512

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

1998 1999 2000 2001 2002 2003 2004(*)

0

500

1000

1500

2000

2500

3000

3500

4000

Number of Transactions (million)

Customers (thousand)

Internet Banking

(*) Actual data available until September 2004, annualized data.

20


Results

2. Growth of credit portfolio in the quarter: Small and Medium Sized Companies 9.6% and Individuals 10.7%;

6. Technical Provisions of Pension Plans: R$ 7.7 billion – Growth of 307.7% in the last 24 months against 123.5% of market growth in the same period;

7. Full Amortization of Goodwill related to the association with Companhia Brasileira de Distribuição in the amount of R$ 349 million after tax effects;

3. Net interest margin maintained: small growth to 13.0% in the 3rd Quarter/04 from 12.5% in the 2nd Quarter/04;

4. Provisions maintained: Additional provision for Securities of R$ 600 million; Exceeding provision for loan losses of R$ 1,000 million;

1. Results: Net Income of R$ 920 million with a decrease of 3.1% in relation to previous quarter; ROE 30.3%; Net income per thousand shares of R$ 8.13; Recurring net income of R$1,226 million; Recurring ROE 41.7%;

5. Insolvency: Nonperforming Loans Ratio presented a positive evolution , reaching 3.2%, against 3.5% on June 30, 2004;

21


2nd Q/043rd Q/04 Jan-Sep/03Var % Var %

2.673Net Interest Margin 2.457 7.503 8.1638,8% -8,1%

Highlights

Jan-Sep/04

13,0%Net Interest Margin (%) 12,5% 12,2% 14,3%- -

(402)Loan Loss Expenses (383) (1.148) (1.592)5,0% -27,9%

1.508Banking Service Fees 1.454 4.366 3.7783,7% 15,6%

(1.886)Personnel+Adm Expenses (1.826) (5.481) (5.334)3,3% 2,8%

(305)Extraordinary Result - (301) (563)- -46,5%

920Net Income 949 2.745 2.298-3,0% 19,5%

1.226Recurrent Net Income 949 3.046 2.86129,2% 6,4%

8,13Net Income / 1,000 shares 8,38 24,24 20,06-3,1% 20,9%

13.471Stockholders’ Equity 12.787 13.471 11.4645,3% 17,5%

30,3%ROE (%) 33,1% 28,1% 27,6%- -

2,7%ROA (%) 3,1% 2,7% 2,6%- -

34.959Market Capitalization 30.485 34.959 25.69114,7% 36,1%

R$ Million (Except where indicated)

22


Resources to the Economic Agents

15,279

31,114

9,609

21,505

4,666

51,059

9,369

11,216

20,585

71,644

Individuals

Loans to Companies

Small and Medium Sized

Corporate

Compulsory Loans (*)

Total - Loans

Public Securities

Private Securities

Total - Securities

Total

Jun 30, 04

13,789

30,855

8,768

22,088

4,068

48,713

10,738

10,745

21,484

70,197

12,777

27,768

6,787

20,982

4,036

44,581

14,784

8,564

23,348

67,929

Sep 30,04

10.7%

0.8%

9.6%

-2.6%

14.7%

4.8%

-12.8%

4.4%

-4.2%

2.1%

Var Sep04/Jun04

Dec 31, 03

R$ Million

19.6%

12.0%

41.6%

2.5%

15.6%

14.5%

-36.6%

31.0%

-11.8%

5.5%

Var Sep04/Dec03

(*) Rural Loans and Mortgage – Loans linked to the availability of Demand deposits and Savings deposits.

23


(*) September 30, 2004.

Credit Operations

16,890

44,810

19,596

27,253

34,282

44,581

51,059

38,419 38,659

29,615

23,674

14,058

16,916

45,414

0

10,000

20,000

30,000

40,000

50,000

60,000

1998 1999 2000 2001 2002 2003 2004 (*)

Credit Operations Credit Operations and Guarantees

R$ Million

CAGR: 21.2%

CAGR: 22.3%

24


(*) Endorsements and sureties included.

R$ BillionCredit Portfolio by Currency (*)

Case the foreign exchange rate had kept the level of June 30, 2004, the credit portfolio would reach R$ 52,172 million on September 30, 2004.

Growth of 2.3%

Growth of 9.4%

R$ 31.8 R$ 32.7 R$ 35.0 R$ 38.3

R$ 12.2 R$ 12.1R$ 13.7

R$ 12.8

R$ 30.2

R$ 12.5

R$ 0.0

R$ 10.0

R$ 20.0

R$ 30.0

R$ 40.0

R$ 50.0

R$ 60.0

Sep-03 Dec-03 Mar-04 Jun-04 Sep-04

Local Currency Foreign Currency

R$ 42.7 R$ 44.1 R$ 44.8R$ 48.7

R$ 51.1

(US$ 4.3)(US$ 4.2) (US$ 4.1)

(US$ 4.4)(US$ 4.5)

Growth of 4.9%

25


Nonperforming Loans Ratio (%)

1.5

3.2

3.54.04.1

4.74.7

8.9 8.3

6.5

6.0

7.3 7.3

2.4 2.52.2

1.9 1.8

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04

Nonperforming Loans Ratio – GlobalNonperforming Loans Ratio – IndividualsNonperforming Loans Ratio – Businesses

Coverage Ratio (*)

173% 189% 198%202% 204% 210%

0%

50%

100%

150%

200%

250%


(*) Provision for Loan Losses / Total Nonperforming Loans

Nonperforming Loans and Coverage Ratio

We are not expecting an ongoing improvement in these indicators, because of the focus on credit products with higher margins, but, at the same time, with a higher credit risk.

26


R$ Million

Banking Service Fees

3rd Q/04

358

303

282

234

180

151

1,508

2nd Q/04

333

312

266

219

182

142

1,454

Jan-Sep/04

1,036

904

791

649

565

422

4,366

Jan-Sep/03

966

743

715

485

515

355

3,778

Var 3Q4-2Q04

7.5%

-2.9%

6.0%

6.7%

-1.1%

6.4%

3.7%

Var9 months

7.3%

21.7%

10.6%

33.8%

9.7%

18.9%

15.6%

Asset Management (*)

Current Account Services

Credit Cards

Sureties and Credits Granted

Collection Services

Other

Total

(*) Mutual Funds and Consortium.

27


Personnel Expenses

Other Administrative Expenses

Reorganization

Total

770

1,041

75

1,886

725

1,034

66

1,826

R$ Million

Administrative Expenses

Strong Cost Control

2,191

3,071

219

5,481

2,009

2,990

335

5,334

6.2%

0.7%

13.6%

3.3%

9.1%

2.7%

-34.6%

2.8%

3rd Q/04 2nd Q/04 Jan-Sep/04 Jan-Sep/03Var 3Q4-2Q04

Var9 months

28


Efficiency Ratio

69,5%56,7% 58,2%

64,2% 59,5% 55,0% 50,0% 46,1%53,1%

44,7%58,3% 58,0%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 9m/03 9m/04

Efficiency Ratio(Current Model) Efficiency Ratio(New Model)

(Non-interest expenses) (1)

(Net interest margin + Banking Service Fee + Partial results of Insurance, Capitalization and Pension businesses + Other operating results - PIS/COFINS taxes)

Efficiency Ratio(new model) =

(1) Personnel expenses + Other Administrative Expenses + Other Operating Expenses + Non-interest-related Tax Expenses

75.6%

58.2%

65.3%

71.6%67.1% 66.8% 65.3%

62.0% 58.6%54.9%

62.1%

55.9%

29


Total Unrealized

Interbank Deposits

Securities and Derivatives

Additional provision

Adjustment – Securities Held to Maturity

Credit Operations

Investment on BPI

Time and Interbank Deposits and Funds from acceptance and issuance of securities abroad

Securitization of Payment Orders Abroad

Subordinated Debt and Treasury Shares

Unrealized Income/(Loss) (1) (2) Stockholders’ Equity

09/30/04

2,366

10

782

600

182

309

691

87

133

354

06/30/04

2,265

3

663

600

63

276

672

80

129

441

R$ Million

1,486

8

594

545

49

193

414

1

56

221

09/30/03

Stockholders’ Equity

Stockholders’ Equity

Financial Instruments – Market Value

(1) Tax effects not considered.(2) Includes unrealized minority interest gains in Equity of R$ 284 million in Sep/04, R$ 276 million in Jun/04 and R$ 170 million in

Sep/03.

30


Banco

Itaú

814

8,182

46.2%

27,559

115,882

213

3,814

24.2%

23,500

38,464

Net income

Tier I Allocated Capital

ROE (%)

Credit Portfolio (*)

Total Assets

778

7,499

48.4%

25,116

97,866

198

3,539

24.3%

23,597

36,161

3rd Q/04 2nd Q/04

(*) Endorsements and sureties included.

R$ Million

Pro Forma

Corpo-

ration

(27)

1,749

-6.1%

-

5,690

Corpo-

ration

(107)

1,474

-25.9%

-

4,986

Note.: The Consolidated figures do not represent the sum of the parts because certain intercompany transactions were eliminated only at the Consolidated level.

Conso-

lidated

920

13,471

30.3%

51,059

138,520

Conso-

lidated

949

12,787

33.1%

48,713

122,760

Banco

Itaú BBA

Banco

Itaú

Banco

Itaú BBA

31


Net Income

Banco Itaú S.A.

213

(107)

814

3Q 04

920

Banco Itaú BBA S.A.

Corporation

Total

Corporate

3rd Quarter of 2004

66%

5%

14%

15%

Banco Itaú - BankingCredit CardsInsurance, Capitalization and Pension PlansMutual Funds and Managed portfolios

Diversification of income sourcesNot dependent only on interest rates

Banco Itaú S.A.

32

3,9915,476

6,1386,987

7,675902927

977957

9761,012

1,1341,168

1,2361,225

1,3041,361

3,352

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


Technical Provisions - InsuranceTechnical Provisions - CapitalizationTechnical Provisions - Pension Plans

5,3886,086

7,6898,320

9,267

Technical Provisions of Pension Plans – growth of 92.3% from Sep/2003 to Sep/2004

R$ Million

10,048

Technical Provisions of Insurance,Capitalization and Pension Plans

Banco Itaú S.A.

33

72.881.1

87.1 89.6 93.8

Sep-03 Dec-03 Mar-04 Jun-04 Sep-04

Growth of 28.9% in the volume of Mutual Funds and Managed Portfolios in relation to September/2003

Volume of Mutual Funds and Managed Portfolios

R$ Billion

Mutual Funds and Managed Portfolios

Banco Itaú BBA

34

3rd Q/04

4102783

(104)(150)

(55)213

3,81424.2%

2nd Q/04

327(7)76

(89)(27)(83)198

3,53924.3%

Var 3Q04

-2Q04

25.5% -

9.2%17.5%

461.5%-34.9%

7.3%7.8%

-

R$ Million

Pro Forma – Banco Itaú-BBA

3rd Q/03

391(164)

67(88)(76)(28)102

3,07813.9%

Var 3Q04

-3Q03

4.7% -

24.6%18.5%97.3%86.0%

109.5%23.9%

-

Net Interest MarginResult from Loan LossesService FeesAdministrative ExpensesTax Income and Social ContributionOtherNet IncomeTier I Allocated CapitalROE (%)

Banco Itaú BBA

35

Sep 30, 04

152

18,872

0.8%

Nonperforming Loans (NPL)

Credit Portfolio (*)

NPL Ratio (%)

Jun 30, 04

226

18,954

1.2%

Variation

-32.7%

-0.4%

Itaú BBA has a high quality credit portfolio with 96.6% of volume

classified as “AA”, “A” and “B”.

R$ Million

Nonperforming Loans – Banco Itaú-BBA

(*) Endorsements and Sureties not included.

36


Small CompaniesR$ 500 thousand < Annual Sales < R$ 10 Million

Itaú Public Sector

Very Small CompaniesAnnual Sales < R$ 500 thousand

Private(Investments > R$ 1 Million)

Personnalité ItaúIncome > R$ 5,000

IndividualsIncome > R$ 2,000

Individuals

Without Account Manager

IndividualsCompanies

Middle MarketR$ 10 Million < Annual Sales < R$ 100 Million

Banco Itaú Holding Financeira

Banco Itaú-BBA Banco Itaú

Large Corporations

• Premium• Investor• Entrepreneur

Card Bearers

With Account Manager

Specialized Structures+ Non-customers:

37Three different store models: Independent, Annex and Corner.

Taií Store

38

New Brand Name (Itaú-based).

Focus on lower income consumers.

Proprietary platform.

Operation launched in June/04 with 3 branches in São Paulo

(nowadays 30).

Forecast to be operating with 150 branches by end-2005.

Uses the Itaú ATM network.

Diversifies credit-related revenues.

Responsive and efficient.

39

Initial Results

Number of Customers : 13,136

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

5.000.000

8/6 30/6 30/7 31/8 30/9 4/11

R$ thousand

2.963

(*) Usage / Limits granted = 96%

Total Limits granted

Usage

3,139

2,070

1,340

386 1.9261.236

310

4.401

4,588

(*)

40

Partnership Itaú - CBD

The Structure of Financeira Itaú CBD S.A.

“Financeira Itaú CBD”

A better and broader financial service and product range for CBD customers

Initial equity: R$ 150 million

50% 50%

Itaú-CBD Joint Venture

41


Growth forecasts for Financeira Itaú CBD S.A.

Consumer Credit Contracts

Private Label cards

Credit Cards3

Personal loans

580 thou

3.3 million

480 thou

-

(1) On March 31 2004.(2) Compound Average Annual Growth Rate (3) Widely accepted credit cards

Number of CAGR2

Year 10

Number of

Current1

3,519 thou

9.3 million

2,646 thou

1,600 thou

22.2%

12.2%

20.9%

Internal Rate of Return = 20%

The joint venture is expected to start contributing to Itaú’s

results after the third year


42


Operating synergy gains

A better and broader financial product and service range for CBD cutomers

Private Label Credit Cards

Other widely accepted credit cards Consumer credit Personal loans

Financial service desks to be installed at all 555 existing stores plus any subsequently opened by CBD.

Itaú-CBD Joint Venture: Characteristics

43


Strategy Greater focus on consumer credit

Long-term partnership: 20 years, extendable

Itaú responsible for operations

Exclusivity as regards financial products and services for CBD customers

Powerful partnership = Stronger commercial relations

Goodwill of R$ 380 million totally amortized in

the 3Q04 income statement


44


The Credicard Conglomerate

The Credicard Conglomerate

Credit Card issuer

Relationship with Commercial

Establishments

Transaction processor

• Largest credit card issuer in Brazil, with an 18.8% market share by transaction volume;

• Number of cards: 7.6 million in September 2004.

• Exclusive capture and transmission of the credit and debit card transactions of issuers like Mastercard, Redeshop and Diners;

• Deals directly with sales points.

• Leader in the credit card processing industry in Brazil, serving approx. 16.1 million cards;

• Diversification of its product range to include any clients accepting cards as a means of payment.

45


7.9 7.8 8.411.2

14.317.2

19.322.0 23.6

28.0

35.3

41.5

47.551.1

106210

319437

517641

770

1,0281,119

1,2851,447

1,000

200152

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004(*)0

500

1,000

1,500

2,000

2,500

3,000

Number of Credit Cards (Million)

Transaction Volume (million)


Attractiveness of the businessBrazilian Credit Card Market

Source: ABECS – Brazilian Association of Credit Card and Related Service Companies

(*) As of September 2004. Transaction data on an annualized basis.

CAGR = 15.8%

CAGR = 22.3%

46


Credicard Banco S.A.New Shareholder Structure

Before After

Itaú

33.33%

Unibanco

33.33%

Citigroup

33.33%

Itaú

50%

Citigroup

50%

47


(50%) (*)

Credicard Banco S.A.Contribution to Itaú

+As of September 30 2004

(50%) (*)

Number of Cards

Revenues(1)

Receivables

Number of Accounts

Market Share - Nr. of cards(2)

Market Share – Revenues(2)

6.6 million

R$ 8.9 billion

R$ 2.1 billion

4.3 million

12.9%

12.2%

7.6 million

R$ 13.7 billion

R$ 3.8 billion

5.2 million

14.9%

18.8%

10.3 million

R$ 15.1 billion

R$ 3.8 billion

6.9 million

20.1%

20.7%

(1) Revenues year-to-date September 2004 (2) Source: ABECS – Brazilian Association of Credit Card and Related Service Companies(*) Credicard’s proprietary cards only

48


Additional Investment in Credicard and Acquisition of Orbitall

Reinforces Itaú’s strategy for the credit card market;

Increases synergies from larger-scale card issuance and transaction processing;

Diversifies range of processing services related to the use of cards as a means of payment;

Expressive increase in market share: by number of credit cards climbed from 12.9% to 20.1% on a 51.1 million cards market.

49


Operational Agreement with Banco BMG12/09/2004

Focus in growing loan operations to individuals

BMG – traditional financial institution specialized in credit facilities reimbursable through payroll deductions to government employees, private sector employees and pensioners or their survivors receiving benefits from the Brazil's Social Security Institute – INSS;

Agreement valid for 3 years involving line of credit of at least R$ 1.5 billion (beginning with R$ 500 Million + R$ 100 Million/month);

Growth in its personal loan portfolio, especially as regards its sales channel for its consumer credit products (Financeira Taíí);

The possibility of offering innovative financial products and services to BMG's customers (insurance, pension plans, capitalization, credit cards and others) through over 15 thousand BMG´s points of sales.

50


Banco Intercap S.A.12/13/2004

Acquisition of approximately R$ 184 million of vehicle finance loans from Banco Intercap;

Represents a client base of 178 thousand clients, of which 55 thousand currently holding vehicle loans;

Acquisition of a sales promotion company, which is the vehicle that generates the credits, comprising systems, contracts with stores, a staff of specialists in analyzing credit for this specific segment, plus a dedicated commercial structure, for R$ 65.5 million.

Vehicles Financing Portfolio

Points of Sale

Employees

R$ 5,269 Million

9,945

1,318

R$ 184 Million

1,153

130

R$ 5,453

Million

11,098

1,448

+

51


134.2Retail Loans 143.3 129.,8

111.9Loans to micro/small/med co’s. 276.5 161.4

109.0Loans to large corporates 98.2 80.0

152.7Mutual Funds/Assets under mgt. 170.8 169.1

123.2Personnel and Admin. Expenses 104.5 118.3

109.5Loan Loss Provision (Assets) 92.8 75.3

152.5Service Fee Income 143.1 125.6

151.1Net Income 162.7 122.0

108.1Annualized ROE 103.7 95.1

150.0Net Income per Employee 166.7 118.5

101.7Efficiency Ratio (*) 90.0 111.0

137.9Earnings per share 159.8 120.4

128.2Total Assets 140.1 114.5

Jan 04 to Sep/04

Itaú Holding x Bradesco xUnibanco

Base date Sep/02 = 100

Jan 04 to Sep/04

Jan.04 to Sep/04

(*) According to

the new model.

52


Sensitivity Analysis – Retail (*)

Assumptions

Inflation

Interest rates (Selic)

Res. requirements - demand deposits

Res. requirements – savings (TR+ 6%

p.a.)

Reduction in Spreads

Increase in Volume

Costs under Control

Scenario post-2005(APIMEC 2003)

9.2% p.a.

26.2% p.a.

45.0%

20.0%

Actual 2003

5.0% p.a.

12.0% p.a.

25.0%

20.0%

(*) Expectations from reading this sensitivity analysis should take into account the risks and uncertainties inherent in any form of economic activity and which are beyond the Itaú Conglomerate’s control (political and economic changes, interest and exchange rate volatility, technological change, inflation, financial disintermediation, competitive pressures on products and pricing and changes in the tax regime).

Actual Sep/04

7.1% p.a.

16.0% p.a.

45,0%

20,0%

53


(*) Expectations from reading this sensitivity analysis should take into account the risks and uncertainties inherent in any form of economic activity and which are beyond the Itaú Conglomerate’s control (political and economic changes, interest and exchange rate volatility, technological change, inflation, financial disintermediation, competitive pressures on products and pricing and changes in the tax regime)

Financial Resources

Retail loans

Corporate loans

Real Estate Finance

Service Fee Revenue

Banking Revenues

Securities-related

Loan Loss Allowance

Costs

Pre-tax net income

Actual 2003

100

Av. balance

100

100

100

100

Fin. Margin

100

100

100

100

100

100

100

100

100

100

Spread

100

100

100

Scenario post-2005 (APIMEC 2003)

130

Av. balance

154

149

152

91

Fin. Margin.

96

98

130

123

101

166

94

120

87

70

Spread

58

62

85

Actual Sep/04

121

Av. balance

122

177

87

74

Fin. Margin.

115

150

39

106

100

118

52

110

102

60

Spread

93

82

45

Sensitivity Analysis - Retail (*)

54


0

200

400

600

800

1.000

1.200

94 95 96 97 98 99 00 01 02 03 04

Itaú (1)Itaú (2)

Bovespa

US$

100

800

192

1.145

Russian Crisis

RealDevaluation

Mexican Crisis

Asian Crisis

Argentine Crisis

Attack to WTC

Itaú(1) Itaú(2) Ibov.

10 years 27.60% 23.12% 6.75%

5 years 20.05% 15.75% 0.65%

2004 64.36% 58.79% 28.23%

Annual Average Appreciation in US$

(1) With reinvestment of dividends (2) Without reinvestment of dividends

Appreciation of the Preferred SharesEvolution of US$ 100 Invested from December 1994 to December 2004

Electoral Period


--------------


January 19-21, 2005Cancún, Mexico

Presentation to:9th Annual Latin American Conference

Silvio de CarvalhoExecutive Director

banco itaú holding financeira s.a. -------------- banco itaú holding financeira s.a. january...

Documents

banco ita holdin

bec banco

brazilian central bank

central banks

brazilian banking sector

banks foreign banks

spread decomposition

brazilian central bank