Transcript Conference Call 2006 Results February 14, 2007 Banco Itaú Holding Financeira S.A. Highlights 1.Results: • • Q4/06: Recurring Net Income of R$ 1,628 million, 2.3% increase compared.

Conference Call
2006 Results
February 14, 2007
1
Banco Itaú Holding Financeira S.A.
Highlights
1.Results:
•
•
Q4/06: Recurring Net Income of R$ 1,628 million, 2.3% increase compared to Q3/06; annualized
ROE of 28.8%. (Full Year 2006: Net Income of R$ 6,195 million and ROE of 32.6%).
Q4/06: Net Income of R$ 1,280 million (Year 2006: Net Income of R$ 4,309)
2. Effects of BankBoston (BKB) acquisition in Brazil, Chile and Uruguay
•
•
Payment – Capital increase in Itaú (R$ 5,954 million), transferring common and preferred shares to
Bank of America (7.44% of the total capital of Itaú).
Effects of BKB acquisition amounted R$ 2,171 million, net of tax effects.
3. 38.2% growth in credit portfolio during 2006, including BKB, and of 24.7%, not
considering BKB.
•
•
•
Vehicles: 64.7% in 2006 and of 14.3% in Q4/06.
Small and Medium Sized Companies: 59.9% (including BKB), 22.4% (excluding BKB) and 3.5% in
Q4/06.
5.3% delinquency ratio as of December 31, 2006 , stable Q-Q.
.
2
Banco Itaú Holding Financeira S.A.
Non-recurring Effects – After Tax
R$ Million
Recurring Net Income
4th Q/06
3rd Q/06
1,628
1,592
2006
6,195
2005
5,443
Non-recurring effects 1
60
286
429
(192)
Result of BKB Brazil 2
-
(43)
(145)
-
Net Income without BKB Brazil acquisition effects
1,687
1,835
6,480
5,251
BKB Acquisition effects
(408)
(1.764)
(2,171)
-
Net Income
1,280
71
4,309
5,251
1 For more details, see page 4 of Management Discussion and Analysis Report.
2
For more details, see Notes to Financial Statements 2a and 21i.
3
Banco Itaú Holding Financeira S.A.
Highlights
R$ Million (Except where indicated)
4th Q/06
3rd Q/06
Net Income
1,280
71
Recurring Net Income
1,628
2006
2005
1,702.1%
4,309
5,251
-17.9%
1,592
2.3%
6,195
5,443
13.8%
1.38
1.39
-1.2%
5.44
4.84
12.4%
Stockholders’ Equity
23,564
21,693
8.6%
23,564
15,560
51.4%
Recurring ROE / Average Equity
annualized (%)
28.8%
32.5%
-370 b.p.
32.6%
36.6%
-400 b.p.
Market Capitalization 1
92,270
76,453
20.7%
92,270
61,935
49.0%
Solvency Ratio (%)
17.2%
16.8%
40 b.p.
17.2%
17.0%
30 b.p.
Efficiency Ratio 2 (%)
47.4%
49.9%
-250 b.p.
47.6%
50.3%
-270 b.p.
5.3%
5.2%
0.1 p.p.
Recurring Net Income per share (R$)
Delinquency Ratio (%)
1
Variation
Variation
Based on the average quotation of the last trading day in the period. It includes the number of shares related to BKB Chile and Uruguay acquisition.
2
4
Banco Itaú Holding Financeira S.A.
Itaú Holding Pro Forma
R$ Million (Except where indicated)
4th Q/06
3rd Q/06
2006
2005
Managerial Financial Margin
4,747
4,328
9.7%
16,958
13,272
27.8%
• Banking Operations
4,191
4,043
3.7%
15,354
12,016
27.8%
• Treasury
429
149
188.1%
1,056
600
76.0%
• Management of Foreign Exchange Risk
from Investments Abroad
127
137
-6.9%
547
656
-16.5%
(1,475)
(1,350)
9.2%
(5,302)
(2,840)
86.7%
Banking Service fees
2,456
2,286
7.4%
9,097
7,738
17.6%
Non Interest Expenses
(3,371)
(3,246)
3.9%
(12,346)
(10,459)
18.0%
Recurring Net Income
1,628
1,592
2.3%
6,195
5,443
13.8%
Average Stockholders Equity
22,629
19,624
15.3%
18,998
14,883
27.6%
ROE annualized (%)
28.8%
32.5%
-370 b.p.
32.6%
36.6%
-400 b.p.
Result from Loan Losses
Variation
Variation
5
Banco Itaú Holding Financeira S.A.
Credit Operation by Client Type
R$ Million (Except where indicated)
With BKB
Dec 31, 06
Individuals
Variation
Sep 30, 06
Dec - Sep
Dec/06 –
Dec/05
40,487
37,571
7.8%
42.2%
9,188
7,976
15.2%
27.3%
• Personal Credit
13,284
13,829
-3.9%
28.7%
• Vehicles
18,014
15,766
14.3%
64.7%
Company Loans
47,263
46,558
1.5%
36.0%
• Small and Medium Sized
20,446
19,762
3.5%
59.9%
• Corporate
26,816
26,796
0.1%
22.1%
5,898
5,740
2.8%
29.9%
93,648
89,869
4.2%
38.2%
• Credit Cards
Mandatory Credit 1
Total Loans
Not considering BKB contribution, total loans reached R$ 84,497 million, an increase of 24.7% in 2006.
1
Rural and Mortgage Loans – Loans linked with the balances of Demand and Savings Deposits.
6
Banco Itaú Holding Financeira S.A.
Credit Portfolio Break down
100%
90%
32.9%
80% 39.0% 37.6% 34.8%
70%
60%
50%
40%
8.5%
7.6%
18.2% 18.4%
7.2%
6.9%
19.0% 18.7%
32.4% 31.9% 29.6% 29.8% 28.6%
6.7%
6.3%
6.2%
6.4%
6.3%
18.8% 22.0% 21.8%
18.9% 19.1%
30%
20% 34.3% 36.4% 38.9% 41.5%
10%
42.0% 42.8% 45.5% 41.8% 43.2%
0%
Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06
Individuals
Mandatory Loans
Small and Medium-Sized Companies
Corporate
7
Banco Itaú Holding Financeira S.A.
Delinquency and Coverage Ratios
Delinquency Ratios
8.1%
8.3%
Coverage Ratio (*)
250%
8.1%
220%
203%
192%
200%
164%
5.1%
5.2%
5.3%
168%
150%
100%
2.1%
2.2%
50%
1.6%
Jun/06
Sep/06
Dec/06
0%
Dec-04
Delinquency Ratio - Global
Delinquency Ratio - Individuals
Delinquency Ratio - Companies
Jun-05
Dec-05
Jun-06
Dec-06
(*) Provision for loan losses /
Credits overdue for more than 60 days,
which are not accrued.
8
Banco Itaú Holding Financeira S.A.
Delinquency Ratio (NPL) by Segment
R$ Million
Dec 31, 06
NPL
Itaubanco
Credit
Portfolio
Sep 30, 06
NPL Ratio
NPL Ratio
2,614
35,985
7.3%
7.5%
2.355
31,031
7.6%
7.7%
Credit Cards – Account Holders
260
4,954
5.2%
5.9%
Itaú BBA
150
21,334
0.7%
0.1%
1,662
26,829
6.2%
6.4%
Branch Banking
Itaucred
Vehicles
936
19,316
4.8%
5.0%
Credit Cards – Non Account Holders
235
4,285
5.5%
6.6%
Taií
492
3,228
15.2%
13.9%
84,148
5.3%
5.2%
Total
4,426
9
Banco Itaú Holding Financeira S.A.
Funding
R$ Million (except where indicated)
Dec 31,
06
Dec 31,
05
Variation (%)
Dec/06Sep/06
Dec/06Dec/05
89,522
80,949
65,556
10.6%
36.6%
167,866
166,822
112,573
0.6%
49.1%
Managed Portfolios
11,942
10,044
7,714
18.9%
54.8%
Technical Provisions regarding to Insurance,
Pension Plans and Capitalization
19,036
17,534
14,640
8.6%
30.0%
288,367
275,348
200,482
4.7%
43.8%
13,124
21,941
7,828
-40.2%
67.7%
Funds from Acceptances and Securities Issued
7,541
7,568
4,961
-0.4%
52.0%
On-lendings
5,338
5,496
4,305
-2.9%
24.0%
Repurchase Agreement – Third Part Portfolio
8,353
5,477
4,520
52.5%
84.8%
34,355
40,482
21,614
-15.1%
59.0%
322,722
315,831
222,096
2.2%
45.3%
Deposits 1
Investment Funds
Subtotal – Clients
Foreign Exchange Portfolio
Subtotal - Market
Total
1
Sep 30,
06
Includes Repurchase Agreement – Own Issue Securities
10
Banco Itaú Holding Financeira S.A.
Banking Service Fees
R$ Million (Except where indicated)
4th Q/06
3rd Q/06
Variation
483
539
-10.4%
1,986
1,688
17.7%
Current account services
410
385
6.4%
1,549
1,385
11.8%
Credit Cards
577
525
9.9%
2,104
1,904
10.5%
Credit operations and guarantees
provided
486
423
14.8%
1,689
1,259
34.2%
Collection services
250
219
14.4%
909
839
8.3%
Other
250
195
28.4%
859
662
29.7%
Total
2,456
2,286
7.4%
9,097
7,738
17.6%
Funds management
1
2006
2005
Variation
Not considering BKB, Banking Service Fees reached R$ 8,718 million in 2006, increase of 12.7%
compared to 2005.
1 Investment Funds and Consortium.
11
Banco Itaú Holding Financeira S.A.
Non Interest Expenses
R$ Million (Except where indicated)
4th Q/06
3rd Q/06
Personnel Expenses
1,251
1,260
-0.7%
4,824
4,036
19.5%
Other Administrative Expenses
1,681
1,523
10.4%
5,835
4,946
18.0%
1,240
1,141
8.7%
Variation
2006
2005
Variation
Other Operating Expenses
269
332 -19.1%
Tax Expenses (CPMF and Others) 1
171
131
30.6%
447
337
32.6%
3,371
3,246
3.8%
12,346
10,459
18.0%
Total
Not considering BKB, Non Interest Expenses reached R$ 11,470 million in 2006, increase of 9.7%
compared to 2005.
1
It does not include PIS, COFINS and ISS
12
Banco Itaú Holding Financeira S.A.
Efficiency Ratio 1
49.8%
50.8%
50.5%
50.1%
47.2%
49.9%
45.7%
47.4%
50.3%
47.6%
1Q/05
2Q/05
3Q/05
1
4Q/05
1Q/06
2Q/06
3Q/06
4Q/06
For further details on the criteria used, see slide 4.
13
Banco Itaú Holding Financeira S.A.
Segmentation (Pro forma)
Itaú
Itaubanco
Itaú BBA
Itaucred
Banking
Corporate
Operations
Vehicles
Cards – Current
Account Holders
&
Investment Banking
Corporation
Cards – Non Current
Account Holders
Insurance, Pension
Plans and
Capitalization
Taií, FIC (CBD) and
FAI (LASA)
Investment Funds and
Managed Portfolio
NB: The organization chart of Itaucred segment reflects, chiefly, the
transactions carried out through channels intended for non current
account holders.
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Banco Itaú Holding Financeira S.A.
Highlights of Pro Forma Segments
R$ Million (Except where indicated)
Itaubanco
Itaú BBA
Itaucred
Corporation
Itaú 1
4th Quarter of 2006
Recurring Net Income
1,084
297
202
45
1,628
Allocated Capital Tier I
12,244
5,754
2,780
2,787
23,564
RAROC in the Quarter (% p.y.)
36.3%
21.3%
31.7%
5.5%
28.8%
159,178
61,869
25,844
6,253
209,691
Total Assets
3rd Quarter of 2006
Recurring Net Income
793
337
185
277
1,592
Allocated Capital Tier I
11,617
5,407
2,317
2,352
21,693
RAROC in the Quarter (% p.y.)
29.1%
28.0%
33.8%
64.1%
32.5%
158,090
53,803
22,613
5,346
206,935
Total Assets
1
It does not represent the sum of the parts, because there are transactions between the segments eliminated in the consolidated figures only.
15
Banco Itaú Holding Financeira S.A.
Highlights of Pro Forma Segments
R$ Million (Except where indicated)
Itaubanco
Itaú BBA
Itaucred
Corporation
Itaú 1
2006
Recurring Net Income
3,655
1,335
649
557
6,195
Allocated Capital Tier I
12,244
5,754
2,780
2,787
23,564
RAROC (% p.y.)
35.9%
27.7%
29.8%
30.8%
32.6%
159,178
61,869
25,844
6,253
209,691
Total Assets
2005
Recurring Net Income
3,179
1,242
525
497
5,443
Allocated Capital Tier I
7,603
4,328
1,688
1,941
15,560
RAROC (% p.y.)
43.1%
34.2%
39.8%
19.5%
36.6%
117,002
43,256
15,955
4,497
152,435
Total Assets
1
It does not represent the sum of the parts, because there are transactions between the segments eliminated in the consolidated figures only.
16
Itaubanco
The 2006 Outlook of Itaubanco broadcasted in 2005
Results Conference Call.
• Organic growth of classic business lines;
• 30.6% assets growth (without BKB) and 146 new branches and 969
new ATMs, not considering the 66 branches and 104 ATMs of BKB.
• Expansion of Insurance, Pension Plans and Capitalization business areas;
• Technical provisions increased 30.6%.
• Efficiency ratio maintenance (at the same basis);
• Efficiency ratio of 51.2% and 54.1% in 2006 and 2005, respectively.
• 25% growth on credit portfolio.
• The credit portfolio grew 13.7% and 38.8%, not considering BKB and
considering it, respectively.
• Moderate growth in delinquency ratio are expected as a consequence of
targeting operations with higher margins and higher risks (personal loans
and credit cards).
• Delinquency ratio of 7.3% in Dec 31, 2006 and of 6.7% in June of 2006.
17
Itaú BBA
The 2006 Outlook of Itaú BBA broadcasted in 2005
Results Conference Call.
• Focus on Investment Banking and banking services segments;
• 37.9% growth in banking service fees.
• Continuous improvement of market risk management.
• 26.8% increase in Treasury Financial Margin.
18
Itaucred
The 2006 Outlook of Itaucred broadcasted in 2005
Results Conference Call.
• Growth of vehicles financing, developing new segments and presence in regions where penetration is
reduced;
•67.7% growth in the balance of vehicles financing and leasing.
•12 Commercial Platforms opened and 4,569 new car dealers registered in 2006.
• Consolidation and growth of partnerships with CBD (FIC) and Lojas Americanas (FAI);
•48.2% increase in credit portfolio of FIC and 164.7% of FAI.
• Growth of Taií’s outlets number (FIT);
•118 new outlets, increase of 90.8% from 2005.
• New products launch through FIC, FIT and FAI;
• Co-branded card, Private Label, Personal Loan - Card, Installments and Home Insurance.
• Growth of operations with non-account holders;
•Itaucred income correspond to 10.5% of Itaú’s income, with approximately 2.7 million new non
account holders customers.
• Growth of 30% in credit portfolio.
•59.8% growth in credit portfolio
• Expectation of moderate growth of delinquency ratio as a consequence of targeting operations with
higher margins and higher risks (Taií and credit cards).
• Delinquency ratio was 6.2% and 7.1% in Dec 31, 06 and Jun 30, 06, respectively.
19
Itaubanco
2007 Outlook
• Small reduction in delinquency ratio.
• Efficiency ratio improvement.
• 20% - 25% growth in credit portfolio.
• 10% growth in Banking Service Fees (15% in Itaú Holding).
• Opening of 130 branches.
• Expansion the operations in Argentina, Chile and Uruguay.
20
Itaú BBA
2007 Outlook
• Focus on Investment Banking activities.
• Continuous improvement of market risk management.
• Continuous improvement of service fees.
• Consolidation of Corporate clients portfolio in Argentina, Chile and
Uruguay.
• Slight reduction in the credit portfolio.
21
Itaucred
2007 Outlook
Taií
• 100 new sales points.
• 50% growth in credit portfolio (not including payroll loans).
• Efficiency ratio improvement.
• Delinquency ratio improvement.
• On the 4Q/07, we wait to reach break-even of the three operation (FIC, FAI
and FIT).
Vehicles
• 40% growth in vehicles financing and leasing portfolio.
• Efficiency ratio improvement.
• Maintenance of delinquency ratio.
Credit Card
• 20% growth in billing.
• Maintenance of delinquency ratio.
22
Banco Itaú Holding Financeira S.A.
Net Income and Net Income per Share
R$ million
1,579
1,800
1,600
1,283
1,400
1,200
1,030
1,000
800
1,383
0.91
1.00
1.19
1,352
1.21
1,425
1,592
1,628
2.5
1,397
2.0
1.29
1.32
1.33
1.39
1.38
1.5
1.0
600
400
0.5
200
0
0.0
4Q/04
1Q/05
2Q/05
3Q/05
Recurring Net Income
4Q/05
1Q/06
2Q/06
3Q/06
4Q/06
Recurring Net Income per share R$
Note: The Net Income per Share was adjusted to reflect the stock split of 900% that occurred in oct/05.
23
Banco Itaú Holding Financeira S.A.
24
Conference Call
2006 Results
February 14, 2007
25