investor relations 1 banco do brasil 4q05 results
TRANSCRIPT
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Investor RelationsInvestor Relations 1
BANCO DO BRASILBANCO DO BRASIL
4Q05 Results4Q05 Results
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Investor RelationsInvestor Relations 2
4Q04 3Q05 4Q05 %4Q04 %3Q05 2004 2005 %2004Net Interest Income 4,086 4,199 4,398 7.6 4.7 15,464 16,709 8.1Allowance for Loan Losses (868) (966) (1,498) 72.6 55.1 (3,531) (4,527) 28.2Fee Income 1,702 1,952 2,001 17.6 2.5 6,607 7,648 15.8Administrative Expenses (3,252) (3,106) (3,268) 0.5 5.2 (11,524) (12,398) 7.6Net Income 771 1,438 737 -4.4 -48.8 3,024 4,154 37.4Total Assets 239,014 245,511 252,977 5.8 3.0Loan Portfolio 88,554 94,685 101,789 14.9 7.5Securities Portfolio 73,485 68,610 66,470 -9.5 -3.1Deposits 115,532 122,672 137,658 19.2 12.2Asset under Management 124,021 150,378 153,508 23.8 2.1Shareholders' Equity 14,106 16,826 16,850 19.5 0.1
4Q04 3Q05 4Q05 2004 2005ROE - Annualized 24.0 40.8 18.7 23.0 26.8ROA - Annualized 1.3 2.4 1.2 1.3 1.7Spread - Annualized 8.7 9.0 9.2 8.4 8.6Efficiency 59.3 44.9 50.0 54.2 48.1Deliquency ¹ 3.3 3.9 4.0Allowance / Deliquency ¹ 186.0 161.2 165.7BIS Ratio 15.2 17.4 17.1
(1) Past Due Loans + 60 days
R$ million
Dividends
954
1,49857%
%
HighlightsHighlights
2004 2005Payout - % 31.5 36.1
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Investor RelationsInvestor Relations 3
Spread by Loan Portfolio - %
Net Interest IncomeNet Interest Income
Agribusiness Commercial Retail
Net Interest Income - R$ million
NIM¹ Annualized - %
4Q04 1Q05 2Q05 3Q05 4Q05
8.7 8.49.0 9.0 9.2
4Q04 1Q05 2Q05 3Q05 4Q05
4,086 4,090 4,146 4,1994,398
7.0 5.8 6.0 6.1 6.6
8.3 8.0 7.9 7.6 7.6
38.135.9 35.5
33.4 34.1
(1) Net Interest Margin - Related to Earning Assets
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Investor RelationsInvestor Relations 4
91
217 5
4,086
4Q05 - 2.2219
4Q04 - 2.1099
4Q05 - 197,940
4Q04 - 193,649
Volume - R$ million
Spread - %
Volume¹ and Spread AnalysisVolume¹ and Spread Analysis
841
384 21
15,464
2005 - 8.3632
2004 - 8.5708
2005 - 194,9562004 - 184,903
Volume - R$ million
Spread - %
Gain due to Volume
Gain due to Spread
Gain due to Volume and Spread
(1) Earning Assets
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Investor RelationsInvestor Relations 5
4Q04 3Q05 4Q05 %4Q04 %3Q05
Loan Portfolio 88,554 94,685 101,789 14.9 7.5
Domestic 79,537 86,146 92,612 16.4 7.5
Individuals 16,090 18,510 18,386 14.3 -0.7
Payroll Loans 1,477 3,286 3,810 157.9 15.9
SMEs 13,176 15,006 15,204 15.4 1.3
Businesses 20,235 21,383 23,315 15.2 9.0
Agribusiness 30,036 31,247 35,708 18.9 14.3
Abroad 9,017 8,539 9,177 1.8 7.5
R$ million
4Q04 - % 3Q05 - % 4Q05 - %
Loan PortfolioLoan Portfolio
18.2
14.9
22.9
33.9
10.2
18.1
14.9
22.9
35.1
9.0
19.5
15.8
22.6
33.0
9.0
Individuals SMEs Businesses Agribusiness Abroad
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Investor RelationsInvestor Relations 6
Delinquency and Provision for Credit RiskDelinquency and Provision for Credit Risk
(1) Average Portfolio - 12 months and Annualized Expenses
Quarterly Provision Expenses - R$ million
Provision Expenses / Loan Portfolio¹ - %
4.3 4.3 4.2 4.24.7
4Q04 1Q05 2Q05 3Q05 4Q05 6.1 6.1 6.1 6.3 6.6
4.75.1
4.6
5.9 5.6
3.3 3.1 3.13.9 4.0
4Q04 1Q05 2Q05 3Q05 4Q05
868
1,061 1,002 966
1,498
Allowance for loan losses / Loan Portfolio - %Past Due Loans + 15 days / Loan Portfolio - %Past Due Loans + 60 days / Loan Portfolio - %
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Investor RelationsInvestor Relations 7
BB BankingIndustry¹
Retail Commercial Agribusiness ForeignTrade
Abroad
Credit Risk - %Credit Risk - %
(1) Source: Brazilian Central Bank
AA-C D-HAA-C D-H
3Q05 4Q05
87.5 88.4 95.0 95.1 88.7 90.7 99.4 97.9 98.1 98.1
9.3 0.6 2.1 1.9 1.911.34.95.011.612.5
89.5 90.6 89.6 89.9
10.4 10.19.410.5
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Investor RelationsInvestor Relations 8
4Q04 3Q05 4Q05 %4Q04 %3Q05 2004 2005 %2004
Fee Income 1,702 1,952 2,001 17.6 2.5 6,607 7,648 15.8
Customer Relationship Fees 539 637 648 20.3 1.8 2,044 2,514 23.0
Investment Fund Manag. Fees 248 321 310 24.9 -3.5 993 1,219 22.7
Credit Cards 156 186 199 27.9 7.2 563 714 26.7
Collection 173 185 190 9.5 2.5 638 726 13.8
Credit Operations 153 164 162 6.3 -0.7 621 651 4.8
Funds Transfers 116 137 131 12.8 -4.2 461 509 10.5
Others 317 322 360 13.6 11.8 1,286 1,316 2.3
R$ million
Account Holders - million Asset Under Management - R$ billion
Fee IncomeFee Income
(Fees + NII) per account holder¹ - R$
(1) 12 month average
21.1 21.2 21.9 22.3 22.9
286 282 295 284 290
4Q04 1Q05 2Q05 3Q05 4Q05
19.720.8 21.3 20.9 20.2
124.0138.2 144.8 150.4 153.5
4Q04 1Q05 2Q05 3Q05 4Q05
Market Share - %
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Investor RelationsInvestor Relations 9
4Q04 3Q05 4Q05 %4Q04 %3Q05 2004 2005 %2004
Administrative Expenses (3,252) (3,106) (3,268) 0.5 5.2 (11,524) (12,398) 7.6
Personnel Expenses (1,671) (1,709) (1,802) 7.8 5.4 (6,265) (6,834) 9.1
Other Administrative Expenses (1,544) (1,362) (1,428) -7.6 4.8 (5,111) (5,417) 6.0
Telecom. and Data Processing (319) (375) (350) 9.7 -6.6 (1,247) (1,402) 12.4
Amortization and Depreciation (132) (157) (169) 27.9 7.9 (512) (645) 26.0
Security, Guard and Transp. Serv. (210) (177) (197) -6.1 11.4 (724) (740) 2.2
Exp. with Premises and Equipment (174) (172) (182) 4.4 5.5 (621) (703) 13.1
Marketing and Public Relations (265) (114) (132) -50.1 15.7 (556) (451) -18.9
Exp. with Outsourced Services (169) (129) (144) -15.3 11.7 (518) (547) 5.6
Other Administrative Expenses (274) (238) (253) -7.6 6.6 (934) (929) -0.5
Other Tax Expenses (36) (36) (39) 7.3 9.6 (148) (147) -0.5
Legal Risk (258) (268) (281) 9.1 5.0 (908) (783) -13.7
Legal Claims (89) (40) (70) -20.9 77.4 (354) (253) -28.5
Labor Claims (169) (228) (211) 24.8 -7.6 (553) (530) -4.2
Administrative ExpensesAdministrative Expenses
R$ million
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Investor RelationsInvestor Relations 10
Coverage Ratio¹ - % YTD
(1) Fee Income / Personnel Expenses(2) Administrative Expenses / Operating Income
Productivity RatiosProductivity Ratios
Efficiency Ratio² - % YTD
93.1 97.9 104.8 103.4 102.3
4Q04 1Q05 2Q05 3Q05 4Q05
54.250.4 49.0 47.5 48.1
4Q04 1Q05 2Q05 3Q05 4Q05
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Investor RelationsInvestor Relations 11
Income Tax and Social ContributionIncome Tax and Social Contribution
Tax Rate - %Pretax Income - R$ million Taxes - R$ million
1,083
1,6011,760
2,533
1,347
187
559 570
979
447
4Q04 1Q05 2Q05 3Q05 4Q05
17.3
34.932.4
38.6
33.2
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Investor RelationsInvestor Relations 12
2006 Outlook - Warrants2006 Outlook - Warrants
Breakdown of the Warrant Holders
Expected Capital Raise
Conversion:
1 warrant = 1.043933 share
Total do Capital = 810,617,415
% BNB %BNCIndividuals 26.2 38.9Companies 48.6 38.8Foreign Capital 25.1 22.3Total 100.0 100.0
Series Qty. Warrants Qty. Shares Dilutuion - % Exercise Date Exercise Price¹ R$B Warrants 15,993,142 16,695,769 2.0 03.31 a 06.30.2006 21.71C Warrants 27,028,746 28,216,200 3.4 03.31 a 06.30.2011 21.71Total 43,021,888 44,911,969 5.4
(1) Updated up to January 2006 by the Price Index (IGPDI)
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Investor RelationsInvestor Relations 13
World demand growth for food and renewable energy sources;
Reduction of 4.0% in the world grain production in the 2005/2006 crop;
Animal disease epidemy in other countries;
3.7% GDP growth outlook in 2006;
Investment in infrastructure;
Increase in the Brazilian grain production through productivity gain;
Price for some products below that those observed in 2005, but improving in the medium/long term;
Reduction in the Brazilian meat embargoes.
Panorama 2006 - AgribusinessPanorama 2006 - Agribusiness
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Investor RelationsInvestor Relations 14
Panorama 2006 - RetailPanorama 2006 - Retail
To increase sales to customers;
To tap the consumer finance market:
Auto finance;
Durable goods finance.
To establish partnership with middle-sized retailers;
To expand non-customer pay-roll loans;
To grab individuals loan market share;
To tap the mortgage market.
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Investor RelationsInvestor Relations 15
Investor Relations DivisionSBS - Quadra 1 - Bloco C - Ed. Sede III - 5° floor
70073-901 - Brasília (DF)Phone: 55 (61) 3310.3980
Fax: 55 (61) 3310.3735
DisclaimerDisclaimer - This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it’s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the
management’s belief, it also involves imprecision and high difficult risks to be foreseen, consequently, it may conduct to a different result than the one anticipated here. These expectations are highly depended on market conditions, on the Brazilian economic performance, on the sector and the
international market. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation.
For further information access www.bb.com.br/ri