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1
Banco Itaú S.A.Conference Call
3rd Quarter of 2002
2
Income StatementR$ Million
(Except where shown)
Total Assets
2nd Q./02 Var. (%)3rd Q./02
Financial Margin
Provisions for Loan Losses
Service Fee Income
Administrative Expenses
Recurrent Income
Extraordinary Results
Net Income
2,803
(682)
1,042
(1,880)
640
(0)
639
99,014
2,060
(512)
1,004
(1,756)
567
(23)
544
86,385
36.1
33.2
3.8
7.1
12.9
-
17.5
14.6
3
Credit Operations
(*) On September 30, 2002
R$ Million
Credit Operations Credit Operations and Guarantees
14,05816,890
23,67416,077
19,596
27,253 33,799
29,615
14,414
16,916
34,282
39,687
1997 1998 1999 2000 2001 2002*
4
Credit Portfolio by Currency (*)
Indexed in Foreign Currency In Foreign CurrencySubtotal
In Local Currency Total
Sep 30, 02
(*) Including Endorsements and Sureties
Jun 30, 02 Sep 30, 01Variation
Sep/02 – Jun/02Variation
Sep/02 – Sep/01
R$ Million
4,302 8,219 12,521
27,166
39,687
3,883 5,821
9,704
25,135
34,839
4,326 4,978
9,304
24,182
33,485
10.8 % 41.2 %
29.0 %
8.1 %
13.9 %
-0.5 % 65.1 %
34.6 %
12.3 %
18.5 %
5
Non Accrual and Coverage Ratios
Coverage Ratio (*)Coverage Ratio (*)
Total Non Accrual
Individuals Non Accrual
Companies Non Accrual
(*) Provision for Loan Losses / Non Accrual
Non Accrual Ratio %Non Accrual Ratio %
190% 189% 186% 173% 168% 164% 172%
Mar.01 Jun.01 Sep.01Dec.01 Mar.02 Jun.02 Sep.02
9.93
1.21
11.10 11.6212.67 12.90
1.551.50 1.73 1.66
5.905.665.014.394.254.21
5.60
Mar.01 Jun.01 Sep.01 Dec.01 Mar.02 Jun.02 Sep.02
6
R$ Million
(Constitutions) / Reversals in ResultAdditional
MinimumRequired
Provision for Securities Devaluation
Provision for Derivative Financial Instruments – Assets
Provision for Derivative Financial Instruments – Liabilities
Provision for Loan Losses
Total
(1,189)
-
-
(31)
(1,220)
(51)
(968)
699
(651)
(971)
Total
(1,240)
(968)
699
(682)
(2,191)
3rd Quarter of 2002Balance
Sep 30, 02
(3,969)
(1,293)
880
(3,262)
(7,644)
Provisions
7
564348 Result derived from Investments Abroad
3rd Q/02
(1) 1,113 (634)
479 (131)
Foreign Exchange Variation on Investments AbroadEffect Foreign Exchange Risk Management on Investments Abroad (Net)Results AbroadFunding Expenses (CDI)
2nd Q/02
785(93)
692 (128)
Investments AbroadR$ Million
196 145 Result affected by Exchange Rate
2nd Q/02
564266
(553) (3) (132)
-
Results of Investments AbroadResults of Local Operations affected by Exchange Rate (Net)Reversal/(Constitution) of Additional Provision for Securities (Net)Complement of the Provision to “marked-to-market” – AOLAExpenses related to mark-to-market adjustments of fiscal incentive options
3rd Q/02
348 724
(661)(2) (36)
(179)
(1) After provision for US$ = R$ 3,50, excluding foreign exchange variation of the investment in AOLA of R$ 233 million in the 3rd quarter of 2002 and R$ 128 million in the 2nd quarter of 2002.
(2) Provision basically referring to the variation of AOLA´s share market quotation: from US$ 0.640 in 06/28/02 to US$ 0.245 in 09/30/02.
(3) Provision basically referring to the variation of AOLA´s share market quotation: from US$ 2.25 in 03/29/02 to US$ 0.640 in 06/28/02.
Foreign Exchange Variation onInvestments Abroad - Considering the Funding Cost
8
R$ Million
Administrative Expenses
3rd Q./02
888
397119111214
46992
1,880
2nd Q./02
800
356116113216
-956
1,756
Variation
88
413
(2)(2)4636
124
55.3 %49.6 % Efficiency Ratio
- As a result of the 2002/2003 Collective Labor Agreement in September 2002, the Bank incurred additional expenses of R$ 91 million, comprising R$ 46 million for the payment of bonuses to employees and R$ 45 million for compensation and payroll charges .
Personnel Expenses
Remuneration Social Charges Social Benefits / Training Dismissals / Labor Suits Allowance Work ConventionOther Administrative Expenses
Total
9
Market Value
In Result
MarketValue In Equity
RecordedValue
Unrealized Income / (Loss) (2) (3)
(1) Does not include the reclassification of additional provision in the amount of R$ 1 billion.(2) Includes unrealized gains to minority interest amounting to R$ 93 million.(3) Does not consider the corresponding fiscal effects.
R$ Million
2,336
(1,441)
(40)
231
48
331
1,466
24,563
26,000
6,990
11,642
4,069
- Securities and Derivatives
Provision – Available for Sale Securities Reclassification of Additional Provision- Loans Operations
- Other Assets
- Time and Interbank Deposits and Funds
from Acceptance and Issuance of Securities
- Other
Total Unrealized
2,336
(1,000)(40)
231
48
326
1,902
22,227 (1)
26,040
6,760
11,690
4,405
10
Funding and Fund Management
R$ Million
Sep 30, 01(C)
Sep 30, 02(A)
Jun 30, 02(B)
Evolution %(A/C)
Evolution %(A/B)
Deposits
Demand Deposits Savings Deposits Time DepositsManaged Funds
Investment Funds Managed Portfolio
Total Funds
26,743
6,09415,550
5,09953,478
47,7535,725
80,221
28,105
6,35616,019
5,73056,243
49,8196,424
84,348
19.3
25.712.133.3
2.7
0.421.1
8.2
31,891
7,66217,433
6,79654,893
47,9616,932
86,784
13.5
20.68.8
18.6(2.4)
(3.7)7.9
2.9
11
Solvency Ratio
R$ Million
Sep 30, 02
12,532
(718)(401)
11,413
Sep 30, 02 Effect Res.3156
12,532
(1,437)(401)
10,695
Referential Equity
Capital Allocation to Foreign Exchange RiskOther
Adjusted Referential Equity (D)
Jun 30, 02
11,826
(2,440)(356)
9,031
67,436 67,436 Total Risk Weighted Assets (C = A + B) 58,940
61,5475,889
61,5475,889
Weighted Assets (A) Weighted Off-Balance Sheet Exposures (B)
54,1464,794
15.9 %16.9 % Solvency Ratio (E = D / C) 15.3 %
- BACEN resolution 3,155 changed from 50% to 75% the capital allocation to cover foreign exchange exposure. BACEN resolution 3,156 changed this capital allocation to 100%.
12
Corporate Reorganization
12
13
• The companies and its several financial business lines will be
controlled by Banco Itaú Holding Financeira S.A. (ITAÚ
HOLDING). The Banco Itaú Holding Financeira S.A. will
incorporate all the shares of Banco ITAÚ S.A., which will thus
become a wholly owned subsidiary. In the future, Banco ITAÚ
BBA will also become a subsidiary of ITAÚ HOLDING.
Corporate Reorganization
14
Intermediary
52.15%
47.85%
100%
Banco Itaú Holding
Financeira S.A.
Investimentos Itaú S.A. - Itaúsa
Banco Itaú S.A.
Free Float
Present
52.15%
47.85%
Banco Itaú S.A.
Investimentos Itaú S.A. - Itaúsa
Free Float
Corporate Reorganization
15
53.54%
46.46%
100%
Final
95.75%
Investimentos Itaú S.A. - Itaúsa
Banco Itaú Holding Financeira S.A.
Free Float
Banco Itaú BBA S.A. Banco Itaú S.A.
Corporate Reorganization
16
• The corporate reorganization aims at:
– Provide a greater autonomy to the wholesale bank operations.
– In the future, other areas of the business can have more autonomy.
– Decentralize management, enhancing growth of the business, but keeping a
centralized control in Itaú Holding.
– Provide more transparency to the financial statements.
– Maximize capital allocation and utilization among the various segments.
Corporate Reorganization
17
• The corporate reorganization will not imply any stockholder
dilution or any change in the rights enjoyed by the shares
currently held, since the stockholders will receive shares in
ITAÚ HOLDING of the same type and with the same
characteristics as ITAÚ. ITAÚ HOLDING’s bylaws will
extend the same rights as those already provided under those of
ITAÚ.
Stockholders Rights
18
• The inclusion of ITAÚ HOLDING in the group structure will
not change ITAÚSA stake or the remaining stockholders of
ITAÚ;
• The management of ITAÚ continues as the management of
ITAÚ HOLDING, with the same members of the
Administrative Council and some members of the Executive
Board of ITAÚ;
• The exchange ratio between ITAÚ’s and ITAÚ HOLDING’s
stocks will be 1:1.
Corporate Reorganization
19
• Granted by FED at February 20, 2002;
• FED will be requested to authorize the transference of the Financial
Holding Company status from ITAÚ to ITAÚ HOLDING.
Status of Financial Holding Company
20
•There will be no change in the operations and business
transacted with customers, creditors and suppliers;
•With this transaction, ITAÚ and BBA once more reiterate
their confidence in the future of Brazil.
Corporate Reorganization
21
Association with Banco BBA
November 2002
22
1. Objective of Association
2. Investment in Banco BBA
Agenda
23
Itaú´s Strategy
Investment in BBA
Internal Business Segmentation
Successful Bank
History of Posting High Returns
Strong presence in the Wholesale
Segment
Objective of Association
24
Investment in Banco BBA
+
New Bank
ITAÚRetailCorporateAsset Manag./Private BankFinancing (Vehicles), etc.
BBACorporatePrivate BankBrokerageFund PortfolioFinancing
ITAÚWill keep focusing retail
operationsPrivate Bank (Incl.BBA)
Fund Portfolio (Incl.BBA)Financing (Incl.BBA)
Brokerage
ITAÚ BBAITAÚ BBA begins its existence as the largest wholesale bank
in the countryCorporate
Investment Bank
Pres
ent
Futu
re
25
• Largest Capital Base of Brazil (R$ 14.8 billion);
• ITAÚ BBA´s capital will be increased by approximate R$ 1.2
billion.
Investment in Banco BBA
26
Assets 99,014 20,792 119,805
ITAÚ (1) BBA (2) TotalR$ Million
Corporate Loans 23,921 7,486 31,407
Others Loans 10,657 0 10,657
Consumer Finance Loans 5,109 1,153 6,262
21.0%
31.3%
-
22.6%
Deposits 32,498 4,703 37,201 14.5%
Managed Funds and Portfolios 54,893 11,325 66,218 20.6%
Capital Base 11,413 1,856 14,826 -
Change
(1) Data as of September 30, 2002, (2) Preliminary non audited data as of September 30, 2002
If the new structure had been in place at the end of the third quarter, the BIS ratio would have been
18.4%.
Investment in Banco BBA
27
Price
Cash 671
Subordinated Debt – issued in R$ and indexed to CDI (5 years)
619
Shares 544
Subordinated Debt – issued in US$ and indexed to Libor + 1.25% p.a. (12 years)
1,423
Total 3,257
Equity Value 1,735
Goodwill 1,522
Multiple 1.877
R$ MillionNominal Value
671
598
524
813
2,606
1,735
871
1.502
Market Value
a) Discounted using CDI + 0.95% p.a.b) Discounted using Libor + 8.5% p.a. (if adopted Libor+4.83% - the cost of the last emission –
the value would be R$ 1,066 million).c) Market Value of PN stocks on November 4, 2002 – R$ 151.99
a)
c)
b)
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