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Transcript of Relações com Investidores | 1 Investor Relations | 1 Investor Relations 2006 Consolidated Earnings...
Relações com Investidores | 1Investor Relations | 1
Investor Relations
2006 Consolidated Earnings
February 15th, 2007
Unibanco and Unibanco Holdings, S.A.
Relações com Investidores | 2Investor Relations | 2
Net Income (R$ Million)
Stockholders’ Equity (R$ Million)
ROAE (%)
576
9,921
25.8
4Q06 Performance
Relações com Investidores | 3Investor Relations | 3
R$ Millions
Reduction in goodwill amortization period
During 3Q06, Unibanco reduced its goodwill amortization period from 10 to 5 years
2006 2005
1,750 1,838
Net income without goodwill amortization
Net income with goodwill amortization
Stockholders’ equity without goodwill amortization
Stockholders’ equity with goodwill amortization
ROAE without goodwill amortization (%)
ROAE with goodwill amortization (%)
2,210 1,838
9,921 9,324
10,381 9,324
18.2 21.1
22.4 21.1
Acceleration of goodwill amortization (460) -
Relações com Investidores | 4Investor Relations | 4
2006 Performance
ROAE (1)
ROAA (1)
Efficiency Ratio
BIS Ratio
Earnings per share (R$) (1)
(1) Before the extraordinary event of goodwill amortization
49.3% 51.5%
16.0% 15.6%
0.79 0.66
2.3% 2.1%
22.4% 21.1%
-220 b.p.
40 b.p.
19.7%
20 b.p.
130 b.p.
2006 2005
Relações com Investidores | 5Investor Relations | 5
2006
2,210
3,521
2005 20062004
9.3
8.1
10.41
2006/2005
+ 20.2%
+ 20.5%
21.1%
16.8%
22.4%
ROAE (%) Stockholders’ Equity (R$ Bln)
Net Income (1)
Operating Income
(1) Before the extraordinary event.
R$ Millions
2006 Performance
Relações com Investidores | 6Investor Relations | 6
Highlights
6.6% growth in the Retail portfolio in 4Q06, with Credit Cards up 17.1% and SMEs up 7.0%
Loan portfolio quality improvement: 18.8% reduction in provisions for loan losses, 4Q06 versus 4Q05 Better ratio of D-H portfolio over total loans (6.4% vis-à-vis 7.7% in December 2005) Higher E-H portfolio coverage ratio, 115%, compared to 112% in December 2005
Loan
Portfolio
Results
20.2% net income growth, 2006 versus 2005 20.5% operating income growth, 2006 versus 2005 Improvement in Efficiency Ratio: 49.3% in 2006 from 51.5% in 2005
UnitsUBBR11
Up 47% in 2006 compared to a 33% growth of Ibovespa. The greatest growth among Brazilian private-owned banks listed on Bovespa in 2006
Ibovespa weighting: 1.923%. A 95% increase since its inclusion (May 2005)
Financial
Margin
Gross Financial Margin grew to 10.2% in 2006, vis-à-vis 10.0% in 2005, despite the 475 b.p. Selic rate decline
Net Financial Margin improved to 8.0% in 4Q06, higher than the 7.5% in 4Q05
Relações com Investidores | 7Investor Relations | 7
Top 3 in BNDES overall ranking with 8.6% market share
30% increase in cash management revenues
Lead coordinator of Ambev´s debentures issuance, which was awarded “Local Currency Financing Deal” in 2006, by LatinFinance magazine
Investment Banking department made 31 deals, valued at approximately R$18 billion
Top 10 Research House, according to Institutional Investor magazine. 1st place in Natural Resources category, and 3rd place in Consumer Goods
Operational results: 33% of net income in 2006, vis-à-vis 9% in 2005
Leadership in commercial lines, energy, environment, D&O (Directors and Officers) and extended warranty products
Combined ratio of 94.5% in 2006, better than 98.3% in 2005
AUM reached R$44 billion
Private Bank AUM grew 25% in 2006
Awarded “Top Equity Management” by Valor Econômico newspaper, for the 4th consecutive year
17% overall client base growth, reaching 23.8 million, with a 13% increase in branch customers
New partnerships and alliances: Sonae/Wal-Mart, Ipiranga, Grupo VR (UniVR), and Banco Cruzeiro do Sul
Expansion of Hipercard to the South and Southeast, with 145% growth in total points-of-sale 26.7% credit card portfolio growth over the last 12 months Core deposits funding surpassed R$16 billion, +30% in the year
2006 Businesses Highlights
Wholesale
Retail
Insurance andPension Plans
WealthManagement
Relações com Investidores | 8Investor Relations | 8
Retrospectiva
Financial
Information
Relações com Investidores | 9Investor Relations | 9
Personnel and Administrative Expenses
Fees from Services Rendered
Income Statement Summary
R$ Millions
1,6011,956
889909
(1,348)(1,527)
759912
509 576
7,297 6,343
3,582 3,270
(5,713) (5,092)
3,521 2,921
2,210 1,838
2006 2005
Gross Profit from Financial Intermediation Provisions for Loans Losses
Net Profit from Financial Intermediation
Operating Income
Net Income before the extraordinary event
4Q06 4Q05
(656)(533) (2,422) (1,904)
2,2572,489 9,719 8,247
Relações com Investidores | 10Investor Relations | 10
Financial Indicators
Gross Profit from Financial Intermediation
Total Assets Loan Portfolio
Earnings per Unit (R$)
4Q05 1Q06 2Q06
91,831
93,770
98,217
Dec-05 Mar-06 Jun-06
39,875 39,684
2,481
2,257
2,357
4Q05 1Q06 2Q06
2,392
3Q06
101,999
Sep-06
41,929
3Q06
0.37 0.35
0.38
R$ Millions
Dec-05 Mar-06 Jun-06 Sep-06
43,323
0.39
Dec-06 Dec-06
45,361
2,489
4Q06 4Q06
0.42
103,777
Relações com Investidores | 11Investor Relations | 11
Risk Management
Macroeconomic
Scenario
As anticipated by Unibanco in 2005
2,292
3,068 2,910
Dec-04 Dec-05 Dec-06
R$ MillionsLoan Portfolio
Consumer Finance Companies
R$ Millions
107154
4Q04 4Q05 4Q06
232
6.0%6.7%
7.2%
Jun-05 Dec-05 Jun-06
7.6%
Dec-06
5.9%
Feb-05
24% 26% 27%31%
2002 2003 2004 2006
33%
2006
Credit / GDP
Conservative credit approach
41%
10%
22%
Jun-05 Apr-06 4Q06
Approval rate – Fininvest Personal Loans
Financial System
Delinquency ratio
(Individuals)
Risk Management
Provisions for Loan Losses
Consumer Finance Companies Credit restriction
Relações com Investidores | 12Investor Relations | 12
Personal Loans – Mix of Brazilian Financial System
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-01 Apr-02 Sep-02 Feb-03 Jul-03 Dec-03 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Dec-06
Overdraft loans
Personal Loans
Vehicles
Mortgage Loans
Durable Goods Financing - Others
Credit Cards
Others
Payroll loans 60%
40%
Relações com Investidores | 13Investor Relations | 13
Base 100 = 2005 Base 100 = 2005
1472006
114
120
2006
97
MarketMarket
Cars + Trucks & Buses Loans
Dec-05 Dec-06
4,029
4,833
+20.0%
Motorcycle Loans (run-off)
-51.4%
Dec-05 Dec-06
580
282
Business Repositioning
Auto Financing
Focus: New Cars (Financed Units) Focus: New Trucks & Buses (Financed Units)
R$ MillionsR$ Millions
Relações com Investidores | 14Investor Relations | 14
Loan Portfolio (Unicard + Hipercard)
Credit Cards
Number of cards (In millions)
+26.7%
4,001
5,070
Dec-05 Dec-06
+27.7%
14,435
18,433
R$ MillionsR$ Millions
2005 2006
Billings (Unicard + Hipercard)
Jun-04 Dec-04 Jun-05 Dec-05 Jun-06
Total Cards
9
Credit Cards
21
30
5.0
10.0
15.0
20.0
25.0
Private Label cards
30.0
Sep-06 Dec-06
Relações com Investidores | 15Investor Relations | 15
Hipercard
+67%
122
204
Dec-05 Dec-06
Points of sale
+145%
93
228
2005 2006
2.4 2.7
4.2
6.5
Mar-04Acquisition
Dec-04 Dec-05 Dec-06
+171%
Affiliated Retailers
Number of cards (In millions)
In thousands
Relações com Investidores | 16Investor Relations | 16
Loan Portfolio Growth
+13.8%
Sep-06 Dec-06
+4.7%
6.6%
Dec-05
Wholesale
Retail
R$ Millions
39,875
45,361
2.3%
25,940
22,949
19,42116,926
43,323
24,338
18,985
Relações com Investidores | 17Investor Relations | 17
Corporate
Individuals R$ Millions
R$ Millions
Dec-05 Sep-06
+6.4%
15,614
16,383
Dec-06
17,425
+11.6%
+15.1%
24,261
+3.7%
26,940
Main Highlights
27,936
-4.5%
1.9%
17.1%
16.1%
14.7%
6.8%
Quarter
6.0%
17.6%
26.7%
7.0%
2.3%
20.0%
Year
Loan Portfolio Growth
-20.8%-51.4%
Dec-05 Sep-06 Dec-06
Branch Network
Credit Cards
Car Loans
Consumer Finance Companies
Motorcycle Financing
SMEs
Large Corporate
Relações com Investidores | 18Investor Relations | 18
Financial Margin
Net Financial MarginFinancial Margin
23.3%
29.1%27.2% 27.9%
Provisions for Loan Losses / Financial Margin
-770 b.p.
4Q05 2Q06 3Q061Q06
21.4%
4Q06
18.00%
13.25%
Selic Interest Rate
2005 2006
10.2%
10.0%
7.7% 7.7%
Relações com Investidores | 19Investor Relations | 19
Asset Quality
D-H Portfolio/ Loan Portfolio
Dec-05 Sep-06 Dec-06
6.4%6.7%7.7%115%
114%
112%
Dec-05 Sep-06 Dec-06
Coverage E-H Portfolio
Coverage D-H Portfolio
92%87%
67%
Dec-05 Sep-06 Dec-06
Relações com Investidores | 20Investor Relations | 20
441
548
599
Dec-05 Jun-06 Dec-06
+35.8%
R$ Millions
Additional Allowance for Loan Losses
Relações com Investidores | 21Investor Relations | 21
Dec-06 Sep-06 Dec-05
12.4%
9.8%
9.4%
4.6%
6.6%
7.9%
3.4%
5.8%
15.3%
9.4%
9.6%
4.2%
6.6%
8.1%
3.2%
5.9%
10.1%
6.1%
9.2%
3.6%
4.7%
6.1%
3.9%
5.2%
Loan Portfolio Coverage
Consumer Finance Companies
Credit Cards
Retail Bank - Individuals
Auto Financing
SMEs
Retail
Wholesale
Unibanco Consolidated
Allowance for Loan Losses / Loan Portfolio
Relações com Investidores | 22Investor Relations | 22
3,963 4,469 3,778
6,757 5,558 5,629
5,452 4,648 3,044
16,172 14,675 12,451
29,631 29,130 25,946
89,583 86,280 75,793
45,803 43,805 38,397
43,780 42,475 37,396
Dec-06 Sep-06 Dec-05
40%45% 35%
Deposits and Assets under Management
Demand Deposits
Savings Deposits
Core Deposits CDs
Core Deposits
Time Deposits + Debentures
Assets Under Management (B)
Total Deposits + Debentures + AUM (A+B)
Total Deposits + Debentures (A)
Core Deposits / Total Deposits
R$ Millions
Relações com Investidores | 23Investor Relations | 23
Core DepositsR$ Millions
10,81112,451
Dec-04 Dec-05
16,172
Dec-06
(1) Source: Brazilian Central Bank, preliminary data.
29.9%
14.3%Brazilian Financial System (1)
Dec 06vs
Dec 05
Dec 06vs
Dec 04
49.6%
23.9%
+49.6%
Core Deposits Growth
Core Deposits Comparison
Relações com Investidores | 24Investor Relations | 24
4Q06 4Q05
540 521
294 289
75 79
909 889
Fee Income
R$ Millions
2006 2005
2,115 1,892
1,137 1,051
330 327
Total 3,582 3,270
Banking fees, commissions and other fees
Credit Cards
Assets under management
Relações com Investidores | 25Investor Relations | 25
561
930
480
868
2,190
3,450
1,911
3,181
Personnel and Administrative Expenses
Personnel Expenses
Other Administrative Expenses
(1) Does not include the impact of the accouting reclassification at Redecard´s operations (R$36 million in 4Q06 and R$73 million in 2006).
4Q06 4Q05
R$ Millions
2006 2005
1,491 1,348 5,640 5,092Total (1)
Relações com Investidores | 26Investor Relations | 26
Revenues
R$ MillionsEfficiency Ratio Evolution
Efficiency Ratio Expenses
Efficiency Ratio
9,878
5,092
11,593
5,713
2005 2006
51.5%49.3%
8,310
5,058
2004
60.9%
Relações com Investidores | 27Investor Relations | 27
Insurance and Pension Plans
Technical ReservesR$ Millions
Premiums Earned
Pension Plans
Insurance
1,713
2,038
2005 2006
+19.0%
5,3766,345
1,470
1,9536,846
8,298+21.2%
2005 2006
Combined Ratio
98.3%
2005
94.5%
2006
Loss Ratio
48.8%
2006
53.0%
2005
Relações com Investidores | 28Investor Relations | 28
Weighting (%)Jan to Apr-07
Ibovespa 1.923
IBrX-50 3.879
IBrX-100 3.369
IGC Corporate Governance Index 3.967
ISE Sustainability Index* 5.884
Index
* Valid from December 2006 to November 2007.
Units and GDSs
Unibanco Units gained 47% in 2006
Unit continues to increase its weighting
within the Ibovespa. Since its inclusion in the
Ibovespa in May 2005, its participation
increased more than 95%
Units (UBBR11) versus Ibovespa
GDSs (UBB) versus Dow JonesUnits Weighting in Brazilian Stock Indices
Dec-05 Mar-06 Jun-06 Sep-06 Dec-06
UBBR11: 47%
IBOV: 33%
Dec-05 Mar-06 Jun-06 Sep-06 Dec-06
UBB: 46%
Dow:16%
Relações com Investidores | 29Investor Relations | 29
Human Resources
Great Place to Work
Unibanco is one of the 100 best
companies to work for in Brazil,
according to the “Great Place to
Work” consulting group
The company selection
methodology is recognized all over
the world and has been used in over
60 countries
In 2006, the employee motivation
index hit a record of 79%
Employee Motivation Index
70%
74% 74%
76%77%
79%
2000 2001 2002 2003 2005 2006
Relações com Investidores | 30Investor Relations | 30
2007 Outlook
2006 2007 (E)
GDP Growth
Exchange Rate R$/US$ (year end)
SELIC Interest Rate (year end)
IPCA (Consumer Price Index)
Trade Balance (US$)
2.7%(E) 3.5%
2.14 2.20
13.25% 11.75%
4.00%3.14%
39.0 bln46.1 bln
Relações com Investidores | 31Investor Relations | 31
Investor Relationsphone: 5511-3584-1980
fax: 5511-3584-1585email: [email protected]
site: www.ir.unibanco.com
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, Junkets, 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 in duty to update any of the projections contained herein.