Investor Relations 1
Click to edit Master title style
• Click to edit Master text styles– Second level
• Third level– Fourth level
» Fifth level
Unibanco – União de Bancos Brasileiros, S.A. and Unibanco Holdings, S.A.
Institutional Presentation
September 2005
Investor Relations 2
Overview of Unibanco
Investor Relations 3
Highlights
Publicly traded in Bovespa (Brazil) and NYSE
Level III ADR at NYSE and a member of IBOVESPA
Very liquid stock:R$18.3 mln / US$7.8 mln ADTV * at BovespaUS$20.5 mln ADTV * in NYSE
Financial statements in US GAAP since 1997
Controlled by the Moreira Salles group
* For the period Jan 1 - September 15; US$1 = R$2.35
Level I Corporate Governance at Bovespa
Investor Relations 4
Shareholders’ Structure
ON: 89.5%PN: 0.4%
ON: 10.5%PN:0.2%
FloatUnits + GDS
PN: 83.0%
Other
Total: 3.7%Total: 38.1%Total: 58.2%
ON: 2.9%PN: 4.7%
ON: 97.1%PN: 12.3%
PN: 99.4%
FloatUnits + GDS
Moreira Salles Group
Other
Total: 2.2%Total: 38.1%Total: 17.7%
As of September, 2005
Units + GDS:(direct and indirect)
76.1% Float
76.1% of Unibanco's capital are floating shares negotiated in the form of Units + GDS
Investor Relations 5
Units and GDSs
Source: Factset
(1) Based on 30-day moving average of trading volume
Global Offering: September 20031 Secondary Offering:
January 20054IBrX-50 Index inclusion3Market Maker in
BOVESPA2 Inclusion in the Ibovespa 5
Liquidity has increased consistently over the last two years leading to the inclusion of the Unit in the Ibovespa index as of May 2005
Additionally, in the Ibovespa’s new portfolio, released on September 1st, the Unit significantly increased its weight in the index, from 0.984% to 1.264% (28% increase)
BOVESPA (Units)¹NYSE (GDS)¹
Investor Relations 6
• Serves individuals and companies with annual revenues lower than R$150 million
• Approximately 500,000 SMEs and middle mkt business clients
• Leading Consumer Finance franchises
• 20.6 mm credit cards issued
• Hipercard: over 3.0 million cards issued and 84,817 affiliated stores
Retail and Consumer Credit
• Full coverage of 2,000 corporations with annual revenues greater than R$150 million and institutional investors in Brazil and internationally
• Investment Banking: M&A, Capital Markets & Project Finance
Wholesale
A Snapshot of Unibanco
As of June 2005
• Offers investment products via Unibanco Asset Management to individuals and institutional investors and covers high net worth individuals in the private banking segment
• Total assets under management: R$35 billion
• #2 rank in Private Banking (Anbid)
Wealth Management
• Joint venture with AIG
• Individuals and corporate: life, auto, assets, disability, pension funds and annuities
• Strong mkt share growth with increasing profitability:
From 4.9% mkt share in 2000 to 7.8% in 1H05
Insurance & Annuity – Unibanco AIG
• A balanced business mix
• Aggressive expansion in the retail segment
• Benchmark in consumer finance and wholesale business
Investor Relations 7
Organizational Structure
Retail
Márcio Schettini
Retail
Márcio Schettini
Wholesale and Wealth Management
Demosthenes Madureira
Wholesale and Wealth Management
Demosthenes Madureira
Insurance and Pensions
José Rudge
Insurance and Pensions
José Rudge
Audit Committee
Gabriel Jorge FerreiraChairman
Members
Audit Committee
Gabriel Jorge FerreiraChairman
Members
Legal, Audit, and Risk
Lucas Melo
Legal, Audit, and Risk
Lucas Melo
Planning, Control, Operations
and IR
Geraldo Travaglia
Planning, Control, Operations
and IR
Geraldo Travaglia
Corporate Communication
and HR
Marcos Caetano
Corporate Communication
and HR
Marcos Caetano
Treasury
Daniel Gleizer
Treasury
Daniel Gleizer
CEOPedro Moreira Salles
CEOPedro Moreira Salles
Board of Directors
Pedro MalanChairman
Pedro Moreira SallesVice-Chairman
Board of Directors
Pedro MalanChairman
Pedro Moreira SallesVice-Chairman
Gabriel J. Ferreira Israel Vainboim Pedro BodinBoard Members
Eduardo A. GuimarãesGuy Almeida Andrade
Armínio Fraga Joaquim F. Castro Neto João Dionisio
Prominent Board Members Independent Audit Committee
Investor Relations 8
Over 80 years of history to become one of the leading full service banks in Brazil
Timeline
Investor Relations 9
Bridging the gap
Unibanco is the bank that grew its assets the most
over the last 15 years.
Source: Unibanco Research(1) In terms of total assets
Ranking by Assets 1990 Ranking by Assets June 2005
(2) State-owned bank(3) As of March, 2005
1- Banco do Brasil ² 13.8x
2- CEF ² 8.2x
3- Bradesco 2.9x
4- Itaú 2.3x
5- Banespa ² 2.3x
6- Bamerindus 1.6x
7- 1.0x8- Econômico 0.9x
9- Nossa Caixa ² 0.9x
1- Banco do Brasil ²
2.8x
2- Bradesco
2.3x
3- CEF ²/³
1.9x
4- Itaú
1.7x
5-
1.0x6- Santander Banespa
0.9x
7- ABN Real + Sudameris ³
0.8x
8- HSBC + Lloyds
0.6x
Investor Relations 10
Client Focus Nationwide Distribution
Segmentation and Distribution
A superior strategy and comprehensive distribution system...
…foster cross-selling opportunities across our expanding client base
16,923 Points of Service
(As of June 2005)
Branches
North
Northeast
Southeast
South
Mid-West
11
68
672
115
42
Brazil 908
Corp. Site Branches
8
42
29
230
53
362
69
385
133
1,766
250
2,603
316
1,367
991
6,608
2,835
Points of Sale
12,117
4
33
13
181
27
Stores
258
Mid-West 35
Southeast 397
South 243
Stores
Brazil 675
Consumer Finance Companies
North
Northeast
Southeast
South
Mid-West
Brazil
North
Northeast
Southeast
South
Mid-West
Brazil
North
Northeast
Southeast
South
Mid-West
Brazil
North
Northeast
Southeast
South
Mid-West
Brazil
Investor Relations 11
Insurance &Pension
Insurance &Pension
WholesaleWholesale
BranchNetworkBranch
NetworkConsumerFinance
ConsumerFinance
SMEsSMEs
Asset Management
Asset Management
CreditCardsCreditCards
Private BankingPrivate
Banking
Unibanco serves all types of clients and segments
Universal Bank
Auto Financing
Investor Relations 12
Insurance &Pension
Insurance &Pension
WholesaleWholesale
BranchNetworkBranch
NetworkConsumerFinance
ConsumerFinance
SMEsSMEs
Asset Management
Asset Management
CreditCardsCreditCards
Private BankingPrivate
Banking
Auto Financing
Greater focus on higher margin and faster growing businesses …
… maintaining the leadership in the consumer finance segment.
Universal Bank
Investor Relations 13
Consumer Finance
Leading Consumer Finance Platform Consumer Finance Loan Portfolio (R$ Million)
• Fininvest: aggressive growth plan
• Leveraging Alliances and Joint Ventures
• Cross Selling focus: Credit Cards, Banking Accounts, Capitalization, Insurance and Extended Warranty
Leading Consumer Finance Platform
Fully- Owned
Alliances
1,794
2,571
43.3%
Jun-04 Jun-05
Joint-Ventures
Investor Relations 14
Loan Portfolio (R$ Million)
Credit Cards
5.0
10.0
15.0
20.0
Jun-03 Dec-03 Jun-04 Dec-04 Jun-05
Visa
Mastercard
Private Label
Total Cards
Hipercard
20.6
9.4
5.0
3.32.9
17.0
MC + Visa + HiperCardPrivate Label
Total
1H051H046,6904,6511,5361,221
8,2265,872
Δ%
44%26%
40%
32.0%
2,1822,881
• Acquirer, issuer and processor• Accept by over 80 thousand retailers
• New alliances in the co-branded segment
• 1.5 million credit cards issued in 1H05
Jun-04
Jun-05
Total Cards (Million) Highlights
Revenues (R$ Million)
Investor Relations 15
SMEs (R$ Million) Auto Financing (R$ Million)
SMEs & Auto Financing
• Approximately 500,000 companies• Development of account-receivables products• Leveraging synergies with the group (Fininvest,
Unicard, Hipercard)• Wide range of banking services• Fee-based services: cash management, payroll
accounts, etc.• Value-chain approach• Significant contribution to core deposits’ growth
33.3%
3,108
4,143
Jun-04 Jun-05
Strengthen relationship with dealers through Unibanco’s affiliates:
• Fragmented and growing market• 9.3% market share (non-corporate), up 36.2% Y-o-Y• Acquisition of remaining shares of Banco Dibens in
June 2005• Action plan:
37.4%
4,667
6,414
Jun-04 Jun-05
Better qualified, trained and compensated sales force
Larger base of active dealers with 20% growth in 2005
Investor Relations 16
Improved Funding Mix
Main actions:
• Development of alternative sources of funding such as SuperPoupe
• Link individual variable compensation at branch level to Core Deposits
• Focus on cash management services, such as Payroll and Collection
Core deposits
Time Deposits
2003
8,647
16,434
25,081
2004
10,811
22,600
33,411
Jun-05
11,532
23,212
34,744
SuperPoupe (R$ Million)
403
1,030
1,625
1,962
2,350
Jun-04 Sep-04 Dec-04 Mar-05 Jun-05
Funding (R$ Million)
Evolution of Core Deposits
%
Jun-04 to Jun-05
23.6%Unibanco
9.3%National Financial System
2002
8,973
16,937
25,910Total Deposits
Investor Relations 17
Efficiency Ratio (%)
Cost Reduction
(1) Pro-forma: Excludes Credicard
53.7 52.8
60.0
2000
58.0
2001
59.1
2002
57.7
2003
60.9
2004 1Q05 2Q05
Consolidation of back-office & supporting
units;
Establishment of a single corporate
communication area;
Outsourcing of non-core functions;
Main Actions
Fees / Personnel Expenses
153.7%
170.8%
1H04¹ 1H05
Joint procurement with other banks;
Reduction of labor settlement costs;
June 2005: All-time high historical
motivation rate.
Investor Relations 18
15.0
Dec-99¹
R$ billion
Wholesale
Retail
(1) Pro-Forma: excludes Credicard portfolio; includes installment credits.
Loan Portfolio Mix
29.1
Jun-04¹
50%
50%
31.8
Dec-04
54%
46%
35.2
Jun-05
56%
44%
Migrating to higher margin segments with credit expansion focused on consumer finance and SMEs
33%
67%
Investor Relations 19
Consumer Finance
Client base evolution driven by both acquisitions and organic growth
Universal Bank
Client Base
Customers (million)
CAGR = 37%
Joint-Ventures with Consumer
Finance Retailers
0.8
Dec-94
3.7
Dec-99
2.1
Dec-95
4.0
4.1
6.0
Dec-03
14.1
6.4
5.0
5.0
1.8
Dec-04
18.2
Jun-05
6.4
5.4
5.2
2.3
19.3
Dec-00
3.0
4.0
0.7
7.7
5.2
3.9
4.0
Dec-01
13.1
Investor Relations 20
Performance Evolution: 1H05
6.7 6.8 7.0 7.27.4
7.77.9
8.18.4
21.0%
13.8%
17.5%17.1% 16.5% 16.1%
17.3%17.8%
20.1%
1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05
R$ billion
Annualized ROAE (%)Stockholders’ Equity
8.7
2Q05
23.0%
Net Income R$854 million
Operating Income R$1,395 million
+47.0%
+60.0%
1H05 / 1H04
Investor Relations 21
Financial Performance
Investor Relations 22
Income Statement
R$ Million
Profit from Financial Intermediation
(+) Fees from Services Rendered
(-) Personnel & Adm. Expenses
(+/-) Other Operating Income/ Expenses
(=) Operating Income
(+/-) Non-Operating Income
(+/-) Income Tax and Social Contribution
(Effective Income Tax Rate)
(-) Profit Sharing/ Minority Interest
1H04
2,296
1,561
(2,385)
(600)
872
6
(97)
13%
(200)
1H04
Net Income
CAGR = 15%
1st Half Year
739
351
2000
972
431
2001
1,010
475
2002
1,052
491
2003
1,283
581
2004
854
1H05
1H05
3,018
1,560
(2,418)
(765)
1,395
(294)
24%
(257)
10
Net Income 581 854
Investor Relations 23
Financial Highlights
6,098
7,137
8,973 8,647
10,811 11,532
2000 2001 2002 2003 2004 Jun-05
CAGR = 15%
21,615
25,358 26,557 27,678
31,796
2000 2001 2002 2003 2004 Jun-05
35,154CAGR = 10%
51,496 55,616
75,37569,632
79,350
2000 2001 2002 2003 2004
82,992
Jun-05
BIS Ratio (%)
16.5
2000
13.7
2001
15.7
2002
18.6
2003
16.3
2004
Core Deposits (R$ Million)
Total Assets (R$ Million) Total Loans (R$ Million)
CAGR = 11%
16.1
Jun-05
18.0¹
(1) Pro-forma: Consolidates the issuance of the perpetual security in July 05
Investor Relations 24
Performance Ratios
ROAE (%) ROAA (%)
Net Interest Margin (%)
17.5
2000
9.9
2000
16.8
2001
11.2
2001
16.0
2002
9.2
2002
15.3
2003
8.7
2003
16.8
2004
9.1
2004
21.4
1H051
9.8
1H051
(1) Annualized ratios
Efficiency Ratio (%)
1.8
2000
60.0
2000
1.8
2001
58.0
2001
1.5
2002
59.1
2002
1.5
2003
57.7
2003
1.7
2004
60.9
2004
2.1
1H051
53.2
1H05
Investor Relations 25
Corporate
IndividualsSME Large Corporate Total Corporate
Consumer Credit Companies
Commercial Bank & Other Companies
Total Individuals
19,076
21,79520,977
14.3%
3.9%
4,667
6,4145,986 14,409
15,38114,991
37.4%
7.2%
6.7%
2.6%
9,988
13.35912,199
33.8%
9.5%
3,9765,4525,026
6,012
7,9077,173
37.1%
8.5%
31.5%
10.2%
R$ million
Jun-04 Mar-05 Jun-05
Loan Portfolio Mix – by client type
Investor Relations 26
Consumer Credit Companies
3,976
5,026 5,452
Total
37.1%
8.5%
32.0%
9.5%
21.5%
0.6%
Credit Cards(Unicard and HiperCard)
JVs with Retailers(PontoCred and LuizaCred)
1,2501,739 1,910
2,182 2,630 2,881
544657 661
Fininvest
52.8%
9.8%
Jun-04 Mar-05 Jun-05
Loan Portfolio Breakdown - Individuals Portfolio
R$ million
Investor Relations 27
Commercial Bank & Other Companies
Loan Portfolio Breakdown - Individuals Portfolio
Branch Network TotalAuto Financing Other Companies(*)
6,012
7,1737,907
31.5%
10.2%
745 679
947
3,211
4,058 4,370
2,0562,436
2,590
36.1%
7.7%
26.0%
6.3%
27.1%
39.5%
R$ million
(*) Mainly Insurance/Garantech
Jun-04 Mar-05 Jun-05
Investor Relations 28
Credit Ratios
Net Charge Offs / Avg. Total Credit Risk (%)
Allowance for Loan losses / Total Credit Risk (%) Non-Accrual Loans / Total Credit Risk (%)
Allowance for Loan Losses / Non-Accrual (%)
6.76.0 5.9
5.5 5.2 4.9
2000 2001 2002 2003 2004 Jun-05
5.0
2001
4.2
2002
4.8
2003
4.0
2004
4.4
2000
5.0
2001
5.3
2002
4.0
2003
1.8
1H05
Jun-05
3.9
2000¹
5.3
(1) Non-Accrual: March 2001
120
141
115131
2000¹ 2001 2002 2003 2004
126126
Jun-05
3.8
2004
2.2
100%
Investor Relations 29
Financial Margin Financial Margin after Provisions
Financial Margin
Provisions for loan losses/Financial Margin
2Q04
22.1%
8.2%
6.4%
1Q05
17.2%
9.5%
7.9%
2Q05
22.1%
10.2%
7.9%
1Q04
21.0%
9.2%
7.2%
Financial margin has consistently increased over the last quarters
Investor Relations 30
Fees From Services Rendered
R$ million
1H05 1H04 % Y-o-Y
Banking fees and other fees and commissions 884 809 9%
Credit cards (excluding Credicard in 1H04) 476 379 26%
Asset management fees 200 187 7%
Total 1,560 1,375 14%
Excluding Credicard in 1H04 for comparison purposes
Investor Relations 31
3,7704,724 4,848
1,077
1,217 1,424
2Q04 1Q05 2Q05
4,847
5,9416,272
29.4%
Insurance and Private Pension Plans
Technical Reserves
Private PensionInsurance
R$ million
Net Premium Written +Pension Plan Revenues
Net Income
Combined Ratio
Extended Combined Ratio
2Q05 1Q05 1H05 1H04
1,033 1,178 2,211 2,189
84 76 160 148
100.0% 98.6% 99.2% 99.3%
86.4% 85.1% 85.7% 87.2%
Investor Relations 32
SolidFinancial
Performance
StrongManagement
Team
Scale andSustainable
Growth
In sum … we are confident !
SuccessfulBusiness Strategy
Investor Relations 33
Annex I:
New Brand &
New Marketing Campaign
Investor Relations 34
Old
Renewed Brand - 2005
Brand
Branches
MarketingCampaign
New
Investor Relations 35
Annex II:
Dividends
Investor Relations 36
Dividend History
• Unibanco has paid semi-annual dividends for more than 3 decades• In 2005, it started to pay quarterly dividends
35% 38% 37% 38% 35% 35% 36% 37% Pay Out Ratio %
CAGR = 18%
54
143
1997
82
164
1998
102
210
1999
131
264
2000
152
323
2001
160
340
2002
166
362
2003
204
448
2004
283
2005
1st Half Year
R$ million
Investor Relations 37
Annex III:
Ratings
Investor Relations 38
Unibanco Ratings
Fitch Ratings
Unibanco
BB-
Foreign Currency
Brazil
Long Term
Short Term
BB-
B
B
BB-
Local Currency
Brazil
Long Term
Short Term
-
Unibanco BB B
Standard and Poor’s
Unibanco
BB-
Foreign Currency
Brazil
Long Term Short Term
BB-
B
B
BB
Local Currency
Brazil
Long Term Short Term
BUnibanco BB B
Moody’s
Long TermDebt
Long Term Deposits
Short Term Deposits
Financial Strength
Unibanco Ba2 NP D+B2
Brazil B1 B2 NP -
Global Scale: Foreign Currency Global Scale: Local Currency
Long Term Deposits
Short Term Deposits
Unibanco P-2A3
Brazil - -
Investor Relations 39
Annex IV:
Recent Events
Investor Relations 40
Perpetual Securities
Perpetual Securities – US$500 million
Issuing of Perpetual Securities in July, 2005: US$500 million
Coupon: 8.70% p.a.
Rating: Ba2 by Moody's Investors Service, Inc.
Investors: approximately 875 investors, specially from Asia and private banks.
Roadshow: Singapore, Hong Kong, Geneva and London.
100% of the investors visited during the road show were part of the book
The issuance of perpetual securities, if consolidated in June, 2005, would have made the BIS ratio to increase to approximately 18%.
Investor Relations 41
Offering Structure: SEC and CVM-registered Secondary Offering occurred in September, 2005
Selling Shareholder: Caixa Brasil SGPS, S.A., a subsidiary of Caixa Geral de Depósitos S.A. (altogether “CGD”)
Securities offered: 86,149,216 Unibanco Units (UBBR11) in the form of Units and GDSs (UBB), considering the exercise in full of the Green-Shoe Option. Each Unit consists of one Unibanco preferred share and one Unibanco Holdings preferred share and each GDS consists of 5 Units
Offering Size: R$ 1,765 million
Pricing: Unit: R$ 20.49ADR: US$ 44.00
Allocation 26% Units74% GDS
Global Offering
Investor Relations 42
For further information contact our Investor Relations Area at
phone: 5511-3097-1980fax: 5511-3813-6182
email: [email protected]: 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. markets. 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 no duty to update any of the projections contained herein.
Top Related