banco itaú holding financeira s.a. new york march 2005 presentation to: 13 th annual latin america...

Banco Itaú Holding Financeira S.A.

New York

March 2005

Presentation to:13th Annual Latin America Conference


Alfredo SetubalInvestor Relations Director

2Smith Barney-Citigroup 13th Annual Latin America Conference


Agenda

Results - Banco Itaú Holding Financeira

Pro Forma Results - Banco Itaú and Banco Itaú BBA

Important Facts - Banco Itaú Holding Financeira

3


Smith Barney-Citigroup 13th Annual Latin America Conference

Highlights

Growth of Credit Portfolio by Client Type (highlights):

4th Quarter/04 -Individuals 19.7% and Small and Medium Sized Companies 15.7%.

2004 -Individuals 43.1% and Small and Medium Sized Companies 70.8%Net Interest Margin*

4th Quarter/04 = 13.6% p.a. 3rd Quarter/04 = 12.4% p.a.

2004 = 13.2% p.a. 2003 = 13.9% p.a.

Results:

4th Quarter/04 – Net Income of R$ 1,030 million with ROE 32.9% p.a.;

2004 - Net Income of R$ 3,776 million with ROE 27.0% p.a.;

* Excluding the nonrecurring items of 4th Quarter of 2004

Growth of Credit Portfolio (including endorsements and sureties):

Total: 4th Quarter/04 = 4.3% Excluding Corporate Clients: 4th Quarter/04 = 14.8%

2004 = 19.5% 2004 = 43.8%

4



Technical Provisions of Pension Plans:

Balance at Dec/04 of R$ 8.6 billion – Growth of 56.4% in 2004.

Full Amortization of Goodwill: (R$ Million)

Without Tax Effects With Tax Effects

CBD (3rd Q./04) 381 347

Credicard (4th Q./04) 721 656

Orbitall (4th Q./04) 233 212Intercap - Sales promoter (4th Q./04) 65 59

TOTAL 1,400 1,274

Solvency - Nonperforming Loans Ratio:

4th Quarter/04 = 2.9% 3rd Quarter/04 = 3.2%

2004 = 2.9% 2003 = 4.1%

Highlights



R$ Million (Except where indicated)

Net Income

Stockholders’ Equity

ROE (%)

Total Assets

BIS Ratio (%)

Efficiency Ratio (%)

3rd Q/044th Q/04 2004 2003

1,030 920 3,776 3,152

13,971 13,471 13,971 11,879

32.9% 30.3% 27.0% 26.5%

130,339 138,520 130,339 118,738

20.6% 19.4% 20.6% 19.8%

45.9% 52.5% 52.4% 54.5%

Highlights



2.6 2.9 2.1 2.7 2.9

31.5

26.3 26.5 27.0

14.416.9

19.8 20.6

27.7

18.4

0

5

10

15

20

25

30

35

Dec-00 Dec-01 Dec-02 Dec-03 Dec-04

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

Financial Ratios (%)



Efficiency Ratio (%)

47.5%54.6% 56.3% 59.9%

52.5%45.9%

55.8%58.0%

1Q/03 2Q/03 3Q/03 4Q/03 1Q/04 2Q/04 3Q/04 4Q/04

54.5%

52.4%

Annual Efficiency Ratio.

(Personnel Expenses + Other Administrative Expenses + Other Operating Expenses + Tax Expenses except PIS/COFINS/ISS )

(Net Interest Income + Banking Service Fees + Partial Result of Insurance, Capitalization and Pension Plans + Other Operating Income - Tax Expenses of PIS/COFINS/ISS)

Efficiency Ratio =



Exposure – Loans and Securities

Loans

Public Securities

Private Securities

Total

Sep 30, 04Dec 31, 04Var Dec04/

Sep04Dec 31, 03

R$ Million

Var Dec04 /Dec03

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

53,275 51,059 44,581 4.3% 19.5%

7,486 9,369 14,306 -20.1% -47.7%

12,145 11,216 8,564 8.3% 41.8%

72,906 71,644 67,451 1.8% 8.1%



Credit Operations

16,890

47,407

19,596

27,253

34,282

44,581

53,275

14,058

23,674

29,615

38,65938,419

45,414

16,916

0

10000

20000

30000

40000

50000

60000

1998 1999 2000 2001 2002 2003 2004

Credit Operations Credit Operations+Guarantees

R$ Million

CAGR: 21.1%

CAGR: 22.5%



9%9%

34%29%

16%

11%

41%51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004

Restricted Loans Individuals Small and Medium Sized Companies Corporate Loans

Change in the mix of the Credit Portfolio



Nonperforming Loans Ratio (%)

2.93.23.5

4.04.1

7.37.3

5.66.5

6.0

2.2 1.9 1.81.5

0.9

0.00

2.00

4.00

6.00

8.00

10.00

12.00

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

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

Coverage Ratio (*)

198% 202% 204%210% 220%

0%

50%

100%

150%

200%

250%


(*) Provision for Loan Losses / Total Nonperforming Loans

Nonperforming Loans Ratio 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.



R$ MillionService Fees

4th Q/04 3rd Q/04

Asset Management (*)

Current Account Services

Credit Cards

Sureties and Credits

Granted

Collection Services

Other

Total

2004

(*) Mutual Funds and Consortium.

2003Var 4Q04

-3Q04Variation

04-03

376

327

371

266

302

158

1,799

358

303

282

234

180

151

1,508

17

24

89

32

122

7

291

1,411

1,230

1,162

916

866

580

6,165

1,320

1,002

965

653

699

482

5,121

91

228

197

263

167

98

1,044



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

12/31/04 09/30/04

(1) Tax effects not considered.(2) Includes unrealized minority interest gains in Equity of R$ 271 million at December/04, R$ 284 million at September/04 and R$

257 million at December/03.

Financial Instruments – Market ValueR$ Million

12/31/03



10

782

600

182

309

691

39

133

354

10

688

545

143

319

627

33

74

297

2,319 2,048

14

620

400

220

248

660

(41)

93

480

2,074



154

441

525

344

11179514142

222

1,998

3,157

3,624

1,427

1,121813

477284141

2,598

0

50

100

150

200

250

300

350

400

450

500

550

600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000Transactions (milllion)

Registered customers(thousand)

Internet Banking

CAGR: 32.4%

CAGR: 43.4%



Agenda






Diversification of the income sourcesNot dependent only from interest rates

Banco Itaú S.A.

829

(555)

3,502

2004

3,776

Banco Itaú BBA S.A.

Corporation

Total

Net IncomeR$ Million

22.0%

(14.7%)

92.7%

%

100%

750

(335)

2,737

2003

3,152

23.8%

(10.6%)

86.8%

%

100%



Banco

Itaú

Net Income

Tier I Allocated Capital

ROE (%)

Credit Portfolio (*)

Total Assets

2004 2003

(*) Including endorsements and sureties.

R$ Million

Pro Forma

Corpo-

ration

Corpo-

ration

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

Conso-

lidated

Banco

Itaú BBA

Banco

Itaú

Banco

Itaú BBA

2,737

7,550

36.2%

20,739

94,641

3,502

7,843

44.7%

29,736

109,983

829

3,194

25.9%

17,671

34,488

(555)

2,934

-18.9%

-

6,597

3,776

13.971

27.0%

47,407

130,339

750

3,213

23.4%

17,919

30,490

(335)

1,117

-30.0%

-

5,438

3,152

11,879

26.5%

38,659

118,738

Banco Itaú S.A.


2004

68.0%

3.6%

12.9%

15.5%

Banco Itaú - BankingCredit CardsInsurance, Pension Plans and CapitalizationMutual Funds and Managed Portfolio

Diversification of income sourcesNot dependent only on interest rates

Consolidated Net Income4th Q/04 3rd Q/04

Variation4Q/04 – 3Q/04

Banco Itaú - Banking 1,123 573 550

Credit Cards 175 122 53

Ins., Pension Pl. and Cap. 101 113 (12)

Funds and Managed Port. 38 30 8

Total 1,437 837 600

2004 2003Variation

2004 - 2003

Banco Itaú - Banking 2,384 1,604 780

Credit Cards 543 540 3

Ins., Pension Pl. and Cap. 451 465 (14)

Funds and Managed Port. 125 128 (3)

Total 3,502 2,737 765

Banco Itaú S.A.


Credit Cards R$ Million (Except where indicated)

Participation in the Net Income of Orbitall and Redecard

Nº of Cards - Itaucard (thousands)

Nº of Cards - Credicard (thousands) (*)

Nº of Cards - Total (thousands)

2004 2003 Variation

7,085

3,595

10,680

12,956

6,519

19,475

390

90

480

5,780

2,246

8,026

10,603

4,787

15,390

400

99

499

1,305

1,349

2,654

2,353

1,732

4,085

(10)

(9)

(19)

22.6%

60.0%

33.1%

22.2%

36.2%

26.5%

-2.5%

-9.1%

-3.8%

(*) Corresponds to the share of Credicard owed by Itaú – 50% at 2004 and 33% at 2003.

63 41 22 53.7%

Turnover - Itaucard

Turnover - Credicard (*)

Turnover - Total

Net Income - Itaucard

Net Income - Credicard (*)

Net Income - Total

Banco Itaú S.A.


4.05.5 6.1

7.0 7.78.6

0.90.9

1.01.0

1.01.0

1.0

1.11.2

1.21.2

1.31.4

1.4

3.4

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

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

Technical Provisions - Pension Plans Technical Provisions - Capitalization

Technical Provisions - Insurance

5.46.1

7.7 8.3

9.3

Technical Provisions – Pension Plans: growth of 43% from Dec. 03 to Dec. 04

R$ Billion

10.011.0

Insurance, Pension Plans and Capitalization

Banco Itaú S.A.


Var 4ºT04-3ºT04

3º Tri/04 4º Tri/04

Result of Ins., Pension Plans and Cap.

Combined Ratio

Claim Ratio

•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 Income/(Expenses)Operating Margin

Financial Income

Administrative and Tax Expenses*

Income Tax and Social Contribution

Other

R$ Million

Insurance, Pension Plans and Capitalization

1,475

(636)

(100)

(591)

54

1,686

(843)

(103)

(579)

41

115

(169)

(23)

(24)

115

(146)

(39)

(20)

113

201 202

101

92.3% 93.5%

51% 55%

14%

33%

3%

-2%

-24%

0%

0%

16%

-41%

21%

-10%

*Except for ISS, PIS and COFINS

2004 2003 Var.2004 - 2003

5,008

(2,578)

(358)

(1,508)

136

6,233

(2,957)

(395)

(2,251)

177

485

(616)

(141)

(84)

623

(623)

(166)

(70)

465

807 701

451

94.1% 97.2%

53% 54%

24%

15%

11%

49%

30%

15%

-22%

-1%

-15%

19%

-3%

Banco Itaú S.A.


7.710.0

11.0

Dec-03 Sep-04 Dec-04

81.193.8

99.8

Dec-03 Sep-04 Dec-04

Resources Managed

Growth of 23.0% in the volume of Funds and Portfolios under Management and 43.4% in the volume of Technical Provisions in relation to Dec/2003

R$ Billion

Technical Provisions of Insurance, Pension Plans and Capitalization

Volume of Mutual Funds and Portfolios under Management

Banco Itaú BBA


4th Q/04 3rd Q/04

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

2003

R$ MillionPro Forma

2004Variation

04-03

3912783

(133)(147)

(25)196

3,24526.4%

4643184

(159)(151)

(27)242

3,19433.9%

1,403213306

(622)(416)

(55)829

3,19425.9%

1,989(513)

270(613)(410)

27750

3,21323.4%

(586)726

36(9)(6)

(82)79

(19)

*Except for ISS, PIS and COFINS

Banco Itaú BBA


Strategy Itaú BBA: wholesale bank integrated into a financial conglomerate; Credit perspective for the corporate segment in Brazil: declining spreads, increase in

the competition, limited client base. Currently 51% of all our revenues are non-credit related;

Challenge: to maintain current profitability levels in the next years considering lower margins in credit;

Our strategy: compensate lower gains in credit with an increase in the distribution of non-credit related products and services to our clients through:

Cross-selling – continue to take advantage of the synergy with Itaú, by increasing the selling of structured treasury operations such as hedging and also simpler products such as payroll and collection;

Investment banking – segment likely to expand in the next 5 years (we expect that by the end of this period Brazil becomes an investment grade country).

Itaú BBA is well-positioned in investment banking – leader in fixed income issuances and reinforcing our variable income team in order to build a strong investment banking.

Investment banking currently stands for 5% of Itaú BBA´s revenues. In the next 5 to 6 years our goal is to increase this participation to 20%.



Agenda




26



Banco Itaú Holding in 2005

1. Focus in increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;

2. Consolidation of initiatives related to consumer loans:

(Taií, CBD, Lojas Americanas, Credicard…);

3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (at the same basis);

4. New Segment – Disclosure, starting in next quarter, of a new segment to reflect the performance of business areas related to consumer loans.



Taií

New Brand Name (Itaú-based).

Focus on lower income consumers.

Proprietary platform.

Operation launched in June/04 with 3 branches in São Paulo (currently 29).

Uses the Itaú ATM network.

Diversifies credit-related revenues.

Responsive and efficient.

Forecast: 150 stores by YE 2005.



Retail partnerships

170 stores

250 stores

Forecast for 2005:

February 28, 2005October 27, 2004

Expansion of Focus on direct consumer credit

Long term partnership: 20 years, and renewal option

Operating Management under the responsibility of Itaú

Exclusivity in exploitation of financial products and services to

retailers’ customers



5,780 5,951 6,261 6,639 7,085

2,245 2,308 2,413 2,4383,596


Itaucard Credicard

8,026 8,2598,674 9,077

10,680

In Thousand

Market Share:

20.3%

Increase in Participation on CredicardCredit Card Base



1.00 1.243.03 2.90

5.11 5.467.24 7.45

9.7212.11

4.956.04

7.46

15.85

21.41 21.36

27.66

33.33

0.983.26 2.88

15.99

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

26.00

28.00

30.00

32.00

34.00

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Evolution of Earnings per Share and Dividends per Share (*)

CAGR = 28.6%

R$

(*) In the previous years per lot of thousand shares, as in 2004 a reverse split of shares was carried out.

CAGR = 26.2%

Dividends per Share (*)Earnings per Share (*)

31



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

Real Devaluation

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 dividends reinvestment.(2) Without dividends reinvestment.

Election Period

Preferred Shares Appreciation – in US$Evolution of US$ 100 Invested from Dec. 94 to Dec. 04

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

Presentation to:13th Annual Latin America Conference

Alfredo SetubalInvestor Relations Director

New York

March 2005

banco itaú holding financeira s.a. new york march 2005 presentation to: 13 th annual latin america...

Documents

financeira slide

smith barneycitigroup

th quarter04 individuals

th quarter04 net income

agenda results banco

equity of r

annual efficiency ratio

credit portfolio slide