presentation to: annual ing latam & emea financial conference

Banco Itaú Holding Financeira S.A.

London

April 2005

Presentation to:

Annual ING LatAm & EMEA Financial Conference


Silvio de CarvalhoExecutive Director

2Annual ING LatAm & EMEA Financial Conference


Agenda

Brazilian Economy

Brazilian Banking System

Highlights

Strategy and In-depth Results

Performance of the Shares



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



Sustained Stability

Control of inflation through monetary policy

Adjustment in the external accounts

Fiscal Austerity

Measures taken for Generating Growth

Gradual decline expected in interest rates (SELIC)

Continuing trade balance surplus

Primary Surplus

Change in the public debt profile: reduction in foreign currency exposure

Enhanced government payment capacity

Other initiatives: Social Security Reform, Reform of the Judiciary System and Tax Reform, the Bankruptcy Law, Political Reform, Trade Unions Reform, new rules for home mortgage finance, new regulatory framework for the electricity sector (regulatory agencies)



Exchange rate: remains constant in real terms, taking into account the difference between Brazil’s CPI (IPCA) inflation and US PPI inflation

Inflation expectations: 5.8% in 2005 and 5.0% in 2006 (Focus Survey on March 18,2005)

Interest rate path: compatible with limiting the aggregate demand acceleration in order to bring inflation back to the announced objective

Primary budget surplus: 4.25% of GDP in 2005 and 2006

GDP linear growth trend: 3.0% in 2005 and 3.5% in 2006

Commodities’ prices remain constant in the forecasting horizon

World trade real growth: 9% in 2005 and 8% in 2006

Baseline scenario 2005-2006



Agenda

Brazilian Economy


Highlights






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

Oriented 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



Declining Interest Rates x Increasing Loan Demand: New Revenue Dynamics

Growing Fee Earnings and Tighter Cost Control To Offset Lower Treasury Gains

Focus on Higher-Yielding Consumer Finance and SME Lending

Efforts of Client Acquisition and Gains of Scale

Government Still Attracts Large Portions of the System’s Liquidity; Gradual Replacement of Bonds By Loans

Public Sector Banks Still Dominant: 45% of Deposits

More Aggressive Competition, Not Price Wars

Current Scenario



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 %



Capital (Tier One) / Assets (%)

Source: THE BANKER - Top 1000 – July 2004

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%7.8%

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% 4.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

90 91 92 93 94 95 96 97 98 99 00 01 02 03

Brazilian Banks 1,000 Largest Banks in the World



1. Citigroup2. Bank of America Corp.3. HSBC4. JP Morgan Chase & Co.5. RBS Group†6. Wells Fargo & Co.7. UBS AG8. Wachovia Corp.9. Santander10. Barclays13. Morgan Stanley19. Merrill Lynch & Co.20. US Bancorp21. Credit Suisse Group22. Goldman Sachs23. Lloyds TSB47. Hang Seng Bank49. Bank of New York Co. Inc.56. Banco Itaú Holding Financeira S.A. 65. Kookmin Bank67. Bradesco97. Banco do Brasil S.A.139. Unibanco

BanksMarket Cap.

251,782188,517177,236133,058108,009103,82998,23785,24279,85770,94465,20357,16557,03855,76455,41454,43826,00023,96120,27716,14415,6719,8105,238

US$ Million

United StatesUnited StatesUnited KingdomUnited StatesUnited KingdomUnited StatesSwitzerlandUnited StatesSpainUnited KingdomUnited StatesUnited StatesUnited StatesSwitzerlandUnited StatesUnited KingdomHong kongUnited StatesBrasilKoreaBrasilBrasilBrasil

Country

Source : UBS Global Banks Valuations 03/08/05

Itaú is the 2nd largest bank

by Market Cap. in

Emerging Markets



Agenda

Brazilian Economy


Highlights





69.681.8

130.3118.8111.1

2000 2001 2002 2003 2004

Assets (R$ Billion)

27.334.3

45.4 44.6

53.3

2000 2001 2002 2003 2004

Credit Operations (R$ Billion)

6.67.6

9.0

11.914.0

2000 2001 2002 2003 2004

Stockholders’ Equity (R$ Billion)

7.3 8.110.0

14.2

17.1

2000 2001 2002 2003 2004

Technical Provisions – Insurance, Pension Plans and Capitalization (R$ Billion)

Highlights



1,8412,389 2,377

3,152

3,776

2000 2001 2002 2003 2004

Net Income (R$ Million)

5,9967,056

8,425 8,770 9,014

2000 2001 2002 2003 2004

Administrative Expenses (R$ Million)

5,642 6,2757,777

10,129

12,398

2000 2001 2002 2003 2004

Banking Service Fees (R$ Million)

4,5415,892

7,250

9,22410,220

2000 2001 2002 2003 2004

Net Interest Margin (R$ Million)

Highlights



27.7%31.5%

26.3% 26.5% 27.0%

2000 2001 2002 2003 2004

ROE (%)

2.6%2.9%

2.1%

2.7% 2.9%

2000 2001 2002 2003 2004

ROA (%)

14.4%16.9%

18.4% 19.8% 20.6%

2000 2001 2002 2003 2004

BIS Ratio (%)

67.2%62.1% 58.2% 54.5% 52.4%

2000 2001 2002 2003 2004

Efficiency Ratio (%)

Highlights



2,9953,184 3,190 3,172 3,073

2000 2001 2002 2003 2004

Branches+CSBs

1,4271,998

2,5983,157

3,624

2000 2001 2002 2003 2004

Internet Banking Clients (In million)

11,72513,469

17,92620,021 21,150

2000 2001 2002 2003 2004

ATMs

47,524 45,409 43,215 42,450 45,316

2000 2001 2002 2003 2004

Employees

Highlights



Agenda

Brazilian Economy


Highlights



18



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%

19



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



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

Stockholders’ Equity

Stockholders’ Equity

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



Diversification of the income sourcesNot dependent only from interest rates

829

(555)

3,502

2004

3,776

Banco Itaú S.A.

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%.

35



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.



Credit for Individuals

FIC50% CBD50% Itaú

FAI50% LASA50% Itaú

Own Stores

100% Itaú

Payroll Credit

50% of

Fináustria Itaucred Veículos Banco Fiat Intercap

Vehicles

Itaucred



Taií

New Brand Name (Itaú-based).

Focus on lower income

consumers.

Proprietary platform.

Uses the Itaú ATM network.

Diversifies credit-related

revenues.

Responsive and efficient.

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

Retail partnershipsCBD and LASA



Estimated ExpansionPoints of Sale

3FIC (CBD) 250

0FAI (LASA) 170

Taií – Own stores 30 150

33Subtotal 570

Currently YE 2005Stores

New Itaú Branches 100

Total 670



Financial Products

3.3 millionOwn Credit Cards (Private Label)

Currently

FIC (CBD)

FAI (LASA) 186 thousand

480 thousandCredit Cards

FIC (CBD)

FAI (LASA) -

-Personal Loan Contracts

FIC (CBD)


580 thousandConsumer Credit Contracts

FIC (CBD)


4.7 millionTotal

In Quantities



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



Agenda

Brazilian Economy


Highlights





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 (*)

43



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.

London

April 2005

Presentation to:


Silvio de CarvalhoExecutive Director

presentation to: annual ing latam & emea financial conference

Documents