UBS Global Financial Services Conference
May 10-12, 2004
Presentation to:UBS Global Financial Services Conference
Banco Itaú Holding Financeira S.A.
Alfredo SetubalInvestor Relations Director
Silvio de CarvalhoExecutive Director
2UBS Global Financial Services Conference
Stockholders’ Equity, Net Income and Market Capitalization
11,879
9,0367,578
6,6425,9074,6514,1983,842
3,3373,150
30,453
18.11619.582
17.834
6,7866,2754,978
3,270 3,160
21,297
393 343
592721
2,389 2,377
3,152
880
1.8411,869
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-030
400
800
1,200
1,600
2,000
2,400
2,800
3,200
Stockholders' Equity
Market Capitalization
Net Income
Banco Itaú Holding Financeira S.A.
R$ Million
March 2004Net Income: R$ 876 million
Stockholders´ Equity: R$ 12,478 millionMarket Capitalization: R$ 31,227 million
3UBS Global Financial Services Conference
Points of Sale
1,902 1,841
2,5402,642
3,189 3,192 3,146
18,071
14,579
11,21810,283
7,8887,450
20,133
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
BFB
ATMs
Branches+CSBs
Banco Itaú Holding Financeira S.A.
mar/04
4UBS Global Financial Services Conference
154
441
344
11179
514142
222
1,998
3,157
1,427
1,121
813
477284141
2,598
0
50
100
150
200
250
300
350
400
450
500
1995 1996 1997 1998 1999 2000 2001 2002 2003
0
400
800
1,200
1,600
2,000
2,400
2,800
3,200
3,600
Transactions (million)
Customers (thousand)
Internet Banking
Banco Itaú Holding Financeira S.A.
1st Quarter 2004Transactions: 128 million
Customers: 3.3 million
5UBS Global Financial Services Conference
9.1
3.6
5.5
6.5
7.4
8.8 9.1
BFB
Growth in number of CustomersWith acquisitions
Banco Itaú Holding Financeira S.A.
In Million
6UBS Global Financial Services Conference
Agenda
Results - Banco Itaú Holding Financeira
Results - Banco Itaú
Results - Banco Itaú BBA
Important Facts - Banco Itaú Holding Financeira
7UBS Global Financial Services Conference
Sustained Stability
Control of inflation through monetary policy
Adjustment in the external accounts
Fiscal Austerity
Measures taken for Generating Growth
Gradual decline 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, new rules for home mortgage finance, new regulatory framework for the electricity sector
Banco Itaú Holding Financeira S.A.
Brazilian Scenario
8UBS Global Financial Services Conference
Business
Concentration on businesses with a greater spread
Credit
Personal credit: consortium, credit cards and vehicle financing
Small Business: Retail - UPJ and Middle Market
Dilution of Business Risk and Diversification
Treasury Equilibrium between Private
and Public Securities
High level of capitalizationNew
opportunities
Acquisitions of New Businesses
Share Buyback Program
Dividends
Focus on Profitability
Insurance, Capitalization and Private Pension Plans
Emphasis on Life and Pension Plans
Market leader in home insurance
International Presence (US$ 2.4 bi)
New London Branch
Financing of Brazilian companies overseas
Support for Trade Finance operations
Banco Itaú Holding Financeira S.A.
9UBS Global Financial Services Conference
Controls
Cost Reduction/ Administrative Expenses
Zero Base Budget Internal Campaign: “How much does it
Cost?” Rational use of available resources
Risk Management
Allocated Capital
Corporate Governance
Monitoring Preparation of database for Basel II
Sophisticated Management Models Fixing Return on Allocated Capital adjusted
to the risk of each company
Best Market Practices Control: Audit, Disclosure, Negotiation
Committees and Advisory Boards Increased independence (new outside board
members)
Banco Itaú Holding Financeira S.A.
10UBS Global Financial Services Conference
Banco Itaú Holding Financeira S.A.
1. Sustainable result in the quarter (diversification of income sources), with little influence of non-recurrent items:
– Efficiency Ratio below 50% for the 6th consecutive quarter (strict cost control);
– Consistent growth of banking service fee revenue above IGP-M.
2. Conservative Account Procedures:
– Exceeding Provision for Loan Losses: R$ 1 billion (Mar. 31, 04);
– Market x Book Value: R$ 2.9 billion (Mar. 31, 04), mainly Securities (R$ 1.5 billion) and BPI (R$ 700 million);
– Unrecognized tax credits amounted to the limit (R$ 234 million).
3. Growth in credit portfolio: companies (micro, small and medium-sized companies) and retail:
4. Reduction in credit portfolio non-performing loan ratio (4%)
5. Solvency Ratio (BIS Ratio) above minimum required (19.8% - March 31 2004)
6. Largest Market Capitalization among Latin American banks (R$ 31.2 billion)
7. Growth in Monthly Dividends: R$ 0.13 to R$ 0.17 per one thousand shares
Results
11UBS Global Financial Services Conference
R$ Million (Except where indicated)
876
7.68
12,478
31.2%
126,979
2.8%
2,426
31,277
19.8%
48.8%
4.0%
Net Income
Net Income per 1,000 shares
Stockholders’ Equity
ROE (%)
Total Assets
ROA (%)
Net Interest Margin
Market Capitalization
BIS Ratio (%)
Efficiency Ratio (%)
NPL Ratio (%)
4th Q./03
854
7.49
11,879
32.0%
118,738
2.9%
2,754
30,453
19.8%
49.5%
4.1%
714
6.26
9,983
31.8%
113,098
2.5%
2,965
19,998
19.7%
40.8%
4.2%
1st Q./04 1st Q./03
Banco Itaú Holding Financeira S.A.
Highlights
12UBS Global Financial Services Conference
Financial Ratios
2.6 2.9 2.1 2.7 2.8
31.5
26.3 26.5
31.2
14.416.9
19.8 19.8
27.7
18.4
0
5
10
15
20
25
30
35
Dec-00 Dec-01 Dec-02 Dec-03 Mar-04
Net Income / Assets (ROA) Net Income / Stockholders' Equity (ROE) BIS Ratio
Banco Itaú Holding Financeira S.A.
13UBS Global Financial Services Conference
32,068
48,995
69,555
118,738126,979
81,807
18,25924,445
51,91146,357
111,141
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Mar-04
R$ Million
Asset Evolution
Banco Itaú Holding Financeira S.A.
CAGR: 23.3%
14UBS Global Financial Services Conference
(*) March 31, 2004
Banco Itaú Holding Financeira S.A.
Credit Operations
16,890
38,871
19,596
27,253
34,282
44,581 44,756
14,058
23,674
29,615
38,65938,419
45,414
16,916
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1998 1999 2000 2001 2002 2003 2004 (*)
Credit Operations Credit Operations and Guarantees
Loan OperationsLease OperationsCredit CardsAECOtherSub-totalGuaranteesTotal
32,4181,2943,1711,622
15338,689
5,92344,581
Dec.03
32,6981,5712,9591,509
13438,871
5,88544,756
Mar.04
R$ Million
CAGR: 20.4%
CAGR: 21.4%
15UBS Global Financial Services Conference
Corporate
Small and Medium- Sized Companies
Individuals
Subtotal
Real Estate Financing
Total
24,442
7,312
12,369
19,681
2,267
46,390
-2.6%
11.7%
4.2%
6.9%
-3.4%
1.6%
21,771
7,900
13,089
20,989
1,997
44,756
22,357
7,074
(**) 12,563
19,637
2,066
(**) 44,061
-10.9%
8.0%
5.8%
6.6%
-11.9%
-3.5%
Var Mar/04x Dec/03 Mar 31, 04 Mar 31, 03 Dec 31, 03 Var Mar/04
x Mar/03
(*) Endorsements and Sureties included.(**) The values of Dec. 31, 03 were adjusted excluding R$ 520 million in loans made on 12/18/2003 to
Rio de Janeiro’s public employees, which were totally settled on 01/05/2004.
Banco Itaú Holding Financeira S.A.
R$ Million
Credit Operations (*)
16UBS Global Financial Services Conference
R$ 31.20 R$ 30.20 R$ 32.30 R$ 32.70
R$ 13.40R$ 12.50
R$ 12.20 R$ 12.10
R$ 31.20
R$ 15.20
R$ 0.00
R$ 5.00
R$ 10.00
R$ 15.00
R$ 20.00
R$ 25.00
R$ 30.00
R$ 35.00
R$ 40.00
R$ 45.00
R$ 50.00
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04
Local Currency Foreign Currency
R$ 46.4 R$ 44.6 R$ 42.7 R$ 44.6 R$ 44.8
(US$ 4.6) (US$ 4.5) (US$ 4.7)(US$ 4.3) (US$ 4.1)
(*) Endorsements and Sureties included.
Banco Itaú Holding Financeira S.A.
In Billion
Credit Operations by Currency (*)
17UBS Global Financial Services Conference
1,406 1,5101,692
1,853 1,9532,196
2,5152,332 2,285 2,234
2,378 2,2572,103
630680
680
715715
715
747841 843 848
913906
1,000
3,172 3,128 3,082
3,2903,163 3,103
2,911
3,262
2,6682,568
2,372
2,1902,036
Mar.01 Jun.01 Sep.01 Dec.01 Mar.02 Jun.02 Sep.02 Dec.02 mar.03 jun.03 set.03 dez.03 mar.04
Provision for Loan Losses
Total Provision Exceeding Provision Minimum Provision
Banco Itaú Holding Financeira S.A.
R$ Million
18UBS Global Financial Services Conference
Nonperforming Loans Ratio (%)
1.9
4.04.1
4.74.74.24.2
10.7
8.5
7.37.3
8.9
8.3
1.52.0 2.4 2.5
2.2
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04
Nonperforming Loans Ratio – TotalNonperforming Loans Ratio – IndividualsNonperforming Loans Ratio – Businesses
Coverage Ratio (*)
198%189%
173%
189% 198% 202%
0%
50%
100%
150%
200%
250%
dez/02 mar/03 jun/03 set/03 dez/03 mar/04
(*) Provision Balance / Total Nonperforming Loans
Nonperforming Loans and Coverage Ratio
Banco Itaú Holding Financeira S.A.
19UBS Global Financial Services Conference
1st Q./04
328
17
92
289
62
57
164
244
24
129
1,405
4th Q./03
335
18
88
259
37
59
144
250
24
128
1,343
Mutual Fund Management Fees
Administration of Consortium
Collection
Current Account Services
Tax Collection
Interbank Fees
Credit Operations
Credit Cards
Income from Guarantees Provided
Other Services
Total
1st Q./03
282
1
73
247
46
49
133
236
29
116
1,212
Banco Itaú Holding Financeira S.A.
R$ Million
Banking Service Fees
20UBS Global Financial Services Conference
Personnel Expenses
Other Administrative Expenses
Reorganization
Total
694
1,235
79
2,009
725
1,277
104
2,107
Banco Itaú Holding Financeira S.A.
R$ Million
Administrative Expenses
1st Q./04 4th Q./03
Administrative Expenses under Strict Control
21UBS Global Financial Services Conference
58.456.6 56.3
59.7
55.7 56.3 55.0 54.456.1 55.7
50.4
41.5 40.8
46.7 47.649.5 48.859.5%
55.0%
48.2%
54.1%
Not considering the 4th Q./02 and 1st Q./03, since we consider this criteria indicates better the recurrent efficiency.
Efficiency Ratio (%)
Banco Itaú Holding Financeira S.A.
22UBS Global Financial Services Conference
Total Unrealized
Interbank Deposits
Securities and Derivatives
Exceeding Provision
Adjust. of Securities Available for Sale
Adjust. of Securities Held to Maturity
Credit Operations
Investments (basically in BPI)
Time and interbank dep. and funds from accept. and Issuance of securities abroad
Securitization of payment orders abroad
Subordinated Debt and Treasury shares
Unrealized Income / (Loss) (1) (2)Result Equity
March 2004
2,919 2,279
9
1,512
545
712
255
399
697
75
109
119
9
693
545
-
148
399
697
75
109
298
Result Equity
December 2003
2,677 2,048
10
1,556
545
758
253
319
627
33
74
58
10
688
545
-
143
319
627
33
74
297
(1) Tax effects not considered.(2) Includes unrealized gains to minority interest amounting to R$ 336 million in March and R$ 307 million in December and R$ 286
million in March and R$ 257 million in December on Stockholders’ Equity.
Financial Instruments - Market ValueR$ Million
Banco Itaú Holding Financeira S.A.
23UBS Global Financial Services Conference
• The following slides show the pro forma information about Banco Itaú and
Banco Itaú BBA operations, using internal data for a better disclosure of the
managerial performance of the business units.
• In 2003, it was considered as if the integration process between Banco Itaú
BBA and the corporate segment of Banco Itaú occurred in the beginning of the
year.
Pro Forma
Banco Itaú Holding Financeira S.A.
24UBS Global Financial Services Conference
Banco
Itaú
601
7,213
37.7%
22,985
101,881
Banco
Itaú-BBA
215
3,104
30.7%
22,030
31,130
Net Income
Allocated Capital Tier I
ROE (%)
Credit Operations (*)
Total Assets
Banco
Itaú
651
6,479
46.7%
22,224
95,079
Banco
Itaú-BBA
48
2,924
6.7%
22,468
30,233
March 2004 December 2003
(*) Endorsements and Sureties included.
Banco Itaú Holding Financeira S.A.
R$ Million
Pro Forma
Corpo-
ration
155
2,477
27.4%
-
5,680
Corpo-
ration
60
2,162
11.6%
-
4,620
Note: The Consolidated doesn’t represent the sum of the parts since there are operations among related parties, eliminated only in the Consolidated.
25UBS Global Financial Services Conference
Agenda
Results - Banco Itaú Holding Financeira
Results - Banco Itaú
Results - Banco Itaú BBA
Important Facts - Banco Itaú Holding Financeira
26UBS Global Financial Services Conference
Variation
-9.6%
30.9%
5.2%
-4.3%
30.8%
-39.0%
-7.7%
11.3%
-
Net Interest Margin
Result from Loan Losses
Banking Service Fees
Administrative Expenses
Income Tax and Social Contribution
Other
Net Income
Allocated Capital Tier I
ROE (%)
1st Q./04
2,047
(352)
1,356
(1,928)
(272)
(250)
601
7,213
37.7%
4th Q./03
2,264
(269)
1,289
(2,015)
(208)
(410)
651
6,479
46.7%
Banco Itaú S.A.
R$ Million
Pro Forma
27UBS Global Financial Services Conference
Banco Itaú S.A.
4th Quarter of 2003
57%
7%
16%
20%
Banco Itaú - BankingCredit CardsInsurance, Capitalization and Pension PlansMutual Funds and Managed Portfolio
1st Quarter of 2004
52%
6%
21%
21%
Banco Itaú - BankingCredit CardsInsurance, Capitalization and Pension PlansMutual Funds and Managed Portfolio
Diversification of income sources Not only restricted to interest rates
Consolidated Net Income
28UBS Global Financial Services Conference
2,821 3,3523,991
4,9075,526
612
923906
902927
977957
1,0211,077
1,1341,168
1,2361,225
2,459
569
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04
Technical Provisions - Pension Plans AGF
Technical Provisions - Capitalization Technical Provisions - Insurance
4,4034,804
5,388
6,086
7,689
Banco Itaú S.A.
Growth of 96% in Technical Provisions of Pension Plans from March 2003 to March 2004
R$ Million
Technical Provisions of Insurance,Capitalization and Pension Plans
8,320
29UBS Global Financial Services Conference
1st Q./03 4th Q./03 1st Q./04
102Result of Insurance, Capitalization and
Pension Plans 136124
94.7%Combined Ratio 97.8%94.8%
52.8%Claim Ratio 56.8%55.0%
893
(345)
(78)
(336)
11
• Insurance Premiums, Pension Plan
Contributions and Premium Bonds Revenues• Changes in Technical Provisions• Selling Expenses • Insurance Claims, Pension Plan Benefits
and Premium Bonds Redemption• Other Operating Income/(Expenses)
1,622
(968)
(93)
(412)
34
1,373
(593)
(96)
(529)
30
184Operating Margin 144186
185
(125)
(71)
3
Financial Income
Administrative Expenses
Income Tax and Social Contribution
Other
176
(201)
(56)
(1)
165
(165)
(64)
2
Banco Itaú S.A.
R$ Million
Insurance, Capitalization and Pension Plans
30UBS Global Financial Services Conference
Mutual Funds and Managed Portfolios
59.2 62.9 67.1 71.886.480.1
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04
Growth of 37% in volume of Mutual Funds and Managed Portfolios in relation to March 2003
Banco Itaú S.A.
Assets under Management
R$ Billion
31UBS Global Financial Services Conference
Agenda
Results - Banco Itaú Holding Financeira
Results - Banco Itaú
Results - Banco Itaú BBA
Important Facts - Banco Itaú Holding Financeira
32UBS Global Financial Services Conference
1st Q./04
256150
49(79)(88)(72)215
3,10430.7%
4th Q./03
340(172)
54(92)(15)(67)
482,9246.7%
Net Interest MarginResult from Loan Losses (*)Banking Service FeesAdministrative ExpensesIncome Tax and Social ContributionOtherNet IncomeAllocated Capital Tier IROE (%)
Variation
-24.7%-187.2%
-9.3%-14.1%486.7%
7.5%347.9%
6.2%-
Banco Itaú BBA
R$ MillionPro Forma
Normalized Net IncomeNet Income(*) Provisions constituted in the 4th Q/03
and reverted in 1st Q/ 04, net of taxes.Normalized Net IncomeROE (%)
215
(46)169
23.6%
48
4694
13,5%
347.9%
-79.8%
33UBS Global Financial Services Conference
Mar 31, 04
245
17,361
1.4%
Nonperforming Loans (NPL)
Credit Operations
NPL Ratio (%)
Dec 31, 03
211
17,864
1.2%
Variation
34
(503)
Itaú BBA has a high quality credit portfolio with 95.3% of volume
classified as “AA”, “A” and “B”.
Banco Itaú BBA
R$ Million
Nonperforming Loans
34UBS Global Financial Services Conference
Agenda
Results - Banco Itaú Holding Financeira
Results - Banco Itaú
Results - Banco Itaú BBA
Important Facts - Banco Itaú Holding Financeira
35UBS Global Financial Services Conference
Creation of the Audit Committee (approved in the General Ordinary
Shareholders Meeting);
Election of Mrs. Tereza Grossi to the Board of Directors as the
Financial Expert of the Audit Committee (approved in the General
Ordinary Shareholders Meeting);
Stock Grouping approved by the Administrative Council:
- BOVESPA: 1,000 shares to 1 share
- NYSE: 2 ADRs to 1 Preferred Share
Banco Itaú Holding Financeira S.A.
Important Facts
36UBS Global Financial Services Conference
4.524.89
5.756.20 6.26
6.79 7.057.49 7.68
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1st Q./02 2nd Q./02 3rd Q./02 4th Q./02 1st Q./03 2nd Q./03 3rd Q./03 4th Q./03 1st Q./04
Evolution of Net Income per 1,000 shares
Banco Itaú Holding Financeira S.A.
CAGR = 30.4%
R$
37UBS Global Financial Services Conference
Preferred Shares AppreciationEvolution of US$ 100 Invested from April 1994 to April 2004
Banco Itaú Holding Financeira S.A.
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
Real Plan
Russian Crisis Real Devaluation
US$
Mexican Crisis
Asian Crisis
100
580
185
834
Argentine Crisis
Attack to WTC
Itaú(1) Itaú(2) Ibov.
10 years 23.63% 19.22% 6.35%
5 years 16.80% 12.50% -0.52%
2004 -16.33% -18.34% -13.49%
Annual Average Appreciation in US$
(1) With reinvestment of dividends (2) Without reinvestment of dividends
38UBS Global Financial Services Conference
Variables
Inflation
Interest Rate (SELIC)
Compulsory over Current Deposits
Compulsory over Saving Dep. (TR(***) + 6% p.a.)
Reduction of Spreads
Growth in Volumes
Controlled Expenses
Scenario (*)
6.1% p.a.(**)
16.3% p.a.
45.0%
20.0%
Current
5.0% p.a.
12.0% p.a.
25.0%
20.0%
(**) Future expectations derived from this sensitivity analysis must consider the risks and uncertainties that involve any activities and are away from the control of the companies of the conglomerate (politic and economic changes, volatility in interest rates and exchange, technology changes, inflation, financial disintermediation, competitive pressures over the products and prices and changes in the applicable regulations).
(***) Interest Reference Rate.
Banco Itaú Holding Financeira S.A.
Sensitivity Analysis
(*) Estimated.
39UBS Global Financial Services Conference
• Retail Funds
• Branches
• Personnalité
• Small and Middle Companies
• Credit Cards
• Vehicles Financing
• Insurance, Pension Plans and
Capitalization
Banco Itaú Holding Financeira S.A.
Sensitivity Analysis
40UBS Global Financial Services Conference
R$ Million
Resources 100 100 100 116 94 81
Current Situation Scenario (*)
Average Balance
Financial Margin
Spread Average Balance
Financial Margin
Spread
Loans - Individuals 100 100 100 152 98 60
Loans - Businesses 100 100 100 148 90 57
Real Estate Credit 100 100 100 150 150 100
Banking Service Fees 100 115
Total Revenues 100 101
Insurance Products 100 164
Provisions 100 128
Expenses 100 113
Net Income before tax 100 87(*) Future expectations derived from this sensitivity analysis must consider the risks and uncertainties that involve any activities and are away from the control of the
companies of the conglomerate (politic and economic changes, volatility in interest rates and exchange, technology changes, inflation, financial disintermediation, competitive pressures over the products and prices and changes in the applicable regulations).
Banco Itaú Holding Financeira S.A.
41UBS Global Financial Services Conference
(*) Future expectations derived from this sensitivity analysis must consider the risks and uncertainties that involve any activities and are away from the control of the companies of the conglomerate (politic and economic changes, volatility in interest rates and exchange, technology changes, inflation, financial disintermediation, competitive pressures over the products and prices and changes in the applicable regulations).
R$ Million
Resources 100 100 100 116 94 81
Current Situation Scenario (*)
Average Balance
Financial Margin
Spread Average Balance
Financial Margin
Spread
Loans - Individuals 100 100 100 152 98 60
Loans - Businesses 100 100 100 148 90 57
Real Estate Credit 100 100 100 150 150 100
Banking Service Fees 100 115
Total Revenues 100 101
Insurance Products 100 164
Provisions 100 128
Expenses 100 113
Net Income before tax 100 87
Banco Itaú Holding Financeira S.A.
Return on Capital maintained over
20%
UBS Global Financial Services Conference
May 10-12, 2004
Presentation to:UBS Global Financial Services Conference
Banco Itaú Holding Financeira S.A.
Alfredo SetubalInvestor Relations Director
Silvio de CarvalhoExecutive Director
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